Circle Reveals $3.3 Billion of USDC Reserves Remain at Silicon Valley Bank Amid Insolvency Concerns

By 0xGorki 03/11/23 3:33 AM

Circle Internet Financial, the issuer of the USDC stablecoin, has raised concerns over the fate of its deposits at Silicon Valley Bank (SVB) following the announcement of the bank’s closure by the California Department of Financial Protection and Innovation (DFPI). The bank’s closure is due to liquidity and insolvency concerns, and it is one of six banking partners responsible for managing one quarter of the assets backing the $43 billion stablecoin.

According to Circle’s transparency report, SVB holds approximately $3.3 billion of the ~$40 billion of USDC reserves. Circle has joined calls for the continuity of the important bank in the U.S. economy and will follow guidance provided by state and federal regulators.

Circle tweeted on Friday that while they wait for clarity on how the FDIC receivership of SVB will impact its depositors, Circle and USDC continue to operate normally. The company provided a link to its transparency report, which outlines the reserves backing its USDC stablecoin. They added that the USDC stablecoin continues to operate normally despite the situation.

1/ Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB.

— Circle (@circle) March 11, 2023

It is not clear how the FDIC receivership of SVB will affect USDC or the stablecoin market. However, Circle has assured its customers that they are closely monitoring the situation and will continue to provide updates.

The USDC stablecoin was affected by the bankruptcy of Silicon Valley Bank, leading to a significant drop in the USDC/USDT trading pair on OKX to $0.947. Additionally, the BUSD/USDT trading pair on Binance saw a drop to $0.9941, marking the lowest points recorded since mid-April 2021.