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USDC Tumbles to $0.93 as Circle Reveals $3.3 Billion Held at SVB, Tether and Binance Not Exposed

Market players are concerned about Silicon Valley Bank’s contagion after Friday’s second-largest bank collapse (SVB). Venture capitalists and crypto executives discussed the failure and why the crypto community is watching Circle.

Circle-issued USDC, the second-largest stablecoin, has lost its peg on many exchanges. CoinGeko data shows it trading at $0.94 as of this writing.

Despite having 25% of its cash reserves with SVB—$3.3 billion—Circle said it continues to operate normally. As of late January, Circle’s cash reserves were with U.S.-regulated banks such “Bank of New York Mellon, Citizens Trust Bank, Consumers Bank, New York Community Bank, a part of Flagstar Bank, N.A., Signature Bank, Silicon Valley Bank, and Silvergate Bank.”

According to Circle’s transparency page, the institutions own $11.4 billion, up from $9.88 billion in the report. Circle held U.S. Government Securities for the other 73.7% of its reserves. Circle had $42.3 billion in reserves, 0.1% more than its $42.2 billion token debt. CoinGecko reports USDC’s market cap at $42.8 billion as of March 10 22:00 UST, down $900 million from four hours earlier.

Circle has not yet released a statement detailing its reserves with each banking partner. Twelve months ago, Circle named BNY Melon the “principal custodian” of USDC reserves. Crypto businesses distancing themselves from Silvergate may have preferred Signature Bank, another Circle partner. Even that corporation fell 22% on Friday amid SVB banking fears. Tether, the largest stablecoin issuer, appears unaffected. Tether CTO Paolo Ardoino denied SVB exposure on Twitter.

After SVB’s collapse, market participants are selling USDC and DAI (a crypto-backed stablecoin mostly made of USDC reserves) for Tether’s USDT in DeFi protocol Curve’s 3pool. Ardoinio dubbed the pool activity a “escape to safety” on Twitter. DeFi Llama reports 53.3% Tether domination. Binance CEO Changpeng Zhao also stated that the world’s largest crypto exchange had no Silicon Valley Bank exposure.

 

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