2022 saw the fall of major cryptocurrency firms. The trend has somewhat continued into 2023. After Silicon Valley bank [SVB] and Silvergate, Signature Bank was forced to shut down by New York financial regulators on Mar. 12. However, depositors have been notified that they would regain access to their funds as early as Monday, on Mar. 13. According to data, Circle, a prominent cryptocurrency firm entails a whopping $3.3 billion USDC reserve deposit in SVB.
The industry has been hit with several incidents over the last couple of months. As the community tries to recover, another collapse follows suit. Similarly, the downfall of Signature Bank did cause havoc in the market. Now, Jeremy Allaire, Circle CEO mentioned on Twitter and affirmed that 100% of USDC reserves were “safe and secure.”
Further elaborating on the same, Allaire tweeted,
“100% of USDC reserves are also safe and secure, and we will complete our transfer for remaining SVB cash to BNY Mellon. As previously shared, liquidity operations for USDC will resume at banking open tomorrow morning.”
Furthermore, the firm could no longer issue or redeem USDC through Signature’s Signet division. Signet, a real-time payments system built on the blockchain is designed to operate 24×7. Signet was utilized by Circle, Coinbase, and several crypto trading companies. This, however, was disrupted by the demise of Signature bank. But unlike Coinbase, Circle does not hold USDC reserves on Signature Bank. As a result, Circle will carry out settlements through BNY Mellon as an alternative.
Will USDC perish?
In addition to the aforementioned alternative, the Circle CEO assured that a new banking partner will soon be put in place.
Earlier today, USDC did lose its $1 peg. The stablecoin dipped to a low of $0.947 but it managed to climb back up to a high of $0.9971. At press time, USDC was trading for $0.9933 with a 0.98% daily rise. The daily trading volume of the stablecoin, however, plummeted by 50.25%.