Stablecoin issuer Circle said late Friday that $3.3 billion in cash deposits remained at Silicon Valley Bank (SIVB), the lender which was shut down earlier in the day by regulators after suffering a run on deposits. The sum represents some 8% of the total reserves backing Circle’s stablecoin USDC.
Silicon Valley Bank was one of the six banking partners where Circle held a part of the reserve assets backing its $40 billion USDC stablecoin.
USDC is the second largest stablecoin on the market and a fundamental element of the crypto ecosystem. Concerned investors redeemed over $1 billion of USDC tokens over Friday, causing USDC to temporarily losing its dollar-peg on some exchanges and pushing the largest stablecoin swap pool on decentralized finance platform Curve into heavy imbalance.
At press time, USDC fell to 0.945 USDT, the largest dollar-pegged stablecoin, on crypto exchange Kraken.
“Circle is currently protecting USDC from a black swan failure in the U.S. banking system,” Dante Disparte, Circle’s chief strategy officer, tweeted late Friday. “SVB is a critical bank in the U.S. economy and its failure – without a Federal rescue plan – will have broader implications for business, banking and entrepreneurs,” he added.
