Here’s what venture capitalists and major crypto executives had to say about the failure – and why the crypto community is keeping an eye on Circle in the aftermath.
USDC, the second largest stablecoin and the one issued by Circle, has lost its peg across numerous exchanges. At the time of this writing, it’s trading at around $0.94, according to data from CoinGeko.
However, it’s important to note that Circle stated that the company continues operating as normal, despite the fact that 25% of their cash reserves are at SVB – around $3.3 billion.
Is Circle in Trouble?
A report stated that as of late January, Circle’s cash reserves lied with U.S.-regulated financial institutions including “Bank of New York Mellon, Citizens Trust Bank, Customers Bank, New York Community Bank, a division of Flagstar Bank, N.A., Signature Bank, Silicon Valley Bank, and Silvergate Bank.”
The report claimed that about $9.88 billion are held across all of those institutions, though an updated figure on Circle’s transparency page claimed that number has increased to $11.4 billion. That’s about 26.3% of Circle’s reserves – the rest of which were held in U.S. Treasury Securities.
Circle’s $42.3 billion in total reserves were only about 0.1% higher than its outstanding debt in the form of tokens, amounting to $42.2 billion. As of March 10 22:00 UST, USDC’s market cap is $42.8 billion – down $900 million from just four hours prior, according to CoinGecko .
Fun fact guys! #Circle held part of its stablecoin reserves in Signature Bank, Silicon Valley Bank, and Silvergate Bank as of this January.
Signature is down 46% on the month, and SVB / SI have already failed
License.
