In this photo illustration, a woman holds a smartphone with the USD Coin (USDC) logo displayed on the screen.
Rafael Enrique | Images of SOPA | Lightrocket | Getty Images
USD coin (USDC) came close to resuming its dollar peg on Monday after stablecoin company Circle said the $3.3 billion it held with the now-collapsed Silicon Valley Bank will be “fully available” when US banks open.
USDC is a type of cryptocurrency called a stablecoin that is supposed to be pegged to one another with US dollar. It is backed by real assets, including US Treasuries and cash, and is the second largest stablecoin in existence after bring.
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Circle said last week that $3.3 billion of its cash reserves are in SVB. USDC has lost its peg to $1 since the bank collapse, falling to 86 cents on Saturday, according to CoinDesk data.
Circle said it holds a total of about $9.7 billion in cash. Of that, $5.4 billion is now with BNY Mellon.
The company said that when U.S. banks open on Monday, the $3.3 billion in USDC reserve deposits held at Silicon Valley Bank will be fully accessible to the public.
USDC was close to regaining its peg after Circle’s assurances, and was hovering just below the $1 mark on Monday at around 99 cents, according to CoinDesk data.
Circle’s announcement comes after US regulators last week shut down SVB and took control of its deposits, the biggest banking collapse since the 2008 financial crisis.
On Sunday, the U.S. Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation said SVB depositors would have access to all their money starting Monday.
Circle said USDC can still be redeemed 1-to-1 against the US dollar.
Jeremy Aller, CEO of Circle, said on Sunday that the company has entered into a new partnership with Cross River Bank to mint and buy USDC.
Aller also praised the government’s intervention in the SVB fiasco.
“We are pleased to see that the US government and financial regulators are taking important steps to reduce the risks associated with the banking system,” he said in a press release.
SVB is the latest of several technology and cryptocurrency-focused lenders to collapse over the past few days. Silvergate Capital, a major lender to the crypto industry, said on Wednesday that it is winding down operations and liquidating its bank. And on Sunday, US regulators shut down another crypto lender, Signature Bank, to prevent contagion in the banking sector.
Circle said it has no cash reserves with Signature Bank.
The broader cryptocurrency market rallied on Monday as regulators intervened. Bitcoin jumped 10% to above $22,000.
