Cryptocurrency investors have rushed to redeem their holdings of USD Coin (USDC) after its issuer, Circle, revealed that it had $3.3 billion of its reserves in Silicon Valley Bank (SVB). Concerns over the USDC reserves arose after US regulators took control of the bank. The stablecoin issuer confirmed that it had exposure to the institution, leading to massive withdrawals from the platform.
1/ Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB.
— Circle (@circle) March 11, 2023
Circle stated that its attempt to remove its SVB balances on March 9th was not processed until authorities closed it on March 10th. The market capitalization of USDC has lost approximately $6 billion in the last 24 hours as cryptocurrency investors turn to other stablecoins. According to BeInCrypto data, the USDC market capitalization fell from $43.37 billion to $36.9 billion.
Blockchain analytics firm Peckshield tweeted that Circle burned 2.7 billion USDC in 24 hours. Nansen corroborated the report and added that 70% of these burns were made in the last 8 hours. Meanwhile, concerns over stablecoin reserves have seen USDC lose its 1-dollar parity from its rivals. BeInCrypto data showed that the stablecoin plummeted 10% after the news to $0.90 at the time of writing.
USD Coin USDC Circle Silicon Valley Bank SVB Stablecoin Crypto Investors
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