Circle CEO accesses $3.3B stuck with Silicon Valley Bank, but USDC sees record burn and $4.5B conversion requests since Mar. 10th
Circle, the stablecoin issuer, has finally gained access to its $3.3 billion funds held with the collapsed Silicon Valley Bank (SVB). This news has come as a great relief to the company, which had been struggling to retrieve its cash reserves from the failed lender.
Circle CEO and co-founder, Jeremy Allaire, confirmed the news on March 13, stating that the company has been “able to access” its funds from SVB. Speaking with Bloomberg Markets on March 14, Allaire further added that he believed “very close to everything was able to clear” from the failed lender.
This is good news for Circle, as it had been facing liquidity concerns since news broke that its cash reserves were stuck on SVB. The situation led to USDC, the stablecoin issued by Circle, briefly de-pegging, causing widespread panic in the crypto market.
However, the stablecoin’s dollar peg has since recovered, and the market seems to have stabilized following the news of Circle’s successful retrieval of its funds. Nevertheless, the situation has led to mass redemptions of USDC, resulting in a nearly 10% drop in the stablecoin’s market cap since March 11, according to TradingView.
Meanwhile, USDC’s peer stablecoin Tether (USDT) has recorded a slight increase in its market cap since March 11, climbing by over 1% to $73.03 billion.
The collapse of SVB has raised concerns about the stability of the crypto market and the role of banks in supporting digital assets. As Circle’s experience demonstrates, the collapse of a banking institution can have a significant impact on the crypto market and its participants.
The news of Circle’s successful retrieval of its funds from SVB may provide some reassurance to the market, but it also highlights the need for greater regulation and transparency in the crypto industry. As the industry continues to grow, it is essential that companies and institutions operating within it are held to the same standards as traditional financial institutions.
Record-breaking USDC burn and $4.5 billion in conversion requests since March 10th
In recent days, there has been a significant increase in requests to convert USDC back to cash, with a net value of over $4.5 billion. According to blockchain data, Circle, the second largest issuer of stablecoin in the cryptocurrency market with USDC, has recorded a massive withdrawal of funds over the past few days, following serious depegging caused by bank collapses in the United States.
From the time the Silicon Valley Bank was seized and closed by the US government on Friday, March 10, to the early morning of Tuesday, March 15, on-chain data shows that more than 6.2 billion USDC was sent back to Circle by its holders with requests for conversion to cash. During the same period, the new issuance of USDC was $1.66 billion, resulting in a net withdrawal of over $4.5 billion.
Pretty sure we just had the largest single USDC burn on record at $723M. pic.twitter.com/Vhj3itleoY
— Steven (@Dogetoshi) March 14, 2023
The market cap of USDC has dropped from $43.5 billion before the depegging to $38.2 billion at the time of writing, equivalent to $5.3 billion. It is noteworthy that a USDC burn transaction worth up to $723 million was recorded on the morning of March 15, making it the largest USDC burn transaction in history. The second-largest transaction, with a value of $656 million, was also executed on March 14.
Read more:
- Circle Reveals $3.3 Billion Of USDC Reserves Remain At Silicon Valley Bank Amid Insolvency Concerns
- Silicon Valley Bank Shuttered By California Regulator Over Liquidity And Insolvency Concerns
- Circle Concerned Over USDC Reserves At Silicon Valley Bank