During USDC Depeg, Texas-based blockchain financial service used XRP as a solution to convert funds

By Selena 03/11/23 3:35 PM

Reaper Financial, an Austin, Texas-based blockchain financial firm specializing in buying and burning digital assets, has stated that it is changing the USDC in its Permanent DRIP Fund to XRP in the wake of the USDC depeg event.

“Due to a potential de-pegging event, the USDC in the Permanent DRIP Fund has been converted to XRP until stability returns. We will update as the situation evolves,” the Ripple lawsuit participant stated in a tweet.

🚨NOTICE:

Due to a potential de-pegging event the USDC in the Permanent DRIP Fund has been converted to $XRP until stability returns.

We will update as the situation evolves.$RPR $ASC $ARK $XRP $USDC pic.twitter.com/uGPHKXCXcb

— Reaper Financial (@TheReaperCoin) March 11, 2023

A recent tweet from USDC issuer Circle disclosed that $3.3 billion of its $40 billion in USDC reserves are held by the troubled Silicon Valley Bank (SVB). In addition, The Bank is one of Circle’s six banking partners that it employs to manage roughly 25% of its cash-based USDC reserves.

2/ Like other customers and depositors who relied on SVB for banking services, Circle joins calls for continuity of this important bank in the U.S. economy and will follow guidance provided by state and Federal regulators.

— Circle (@circle) March 11, 2023

As a result of investor redemptions, the USDC stablecoin no longer has a dollar peg. Investors cashed out USDC from controlled exchanges valued close to $8 billion the previous day.

USDC was trading at $0.919 at the time of writing, remaining below its dollar peg. The stablecoins DAI, USDD, and FRAX were trading below their dollar peg at the time of publication. According to Nansen, Circle has burned $2.34 billion USDC over the past 24 hours. About 70%, or $1.65 billion, was lost to fire in the previous eight hours.

In response to the recent situation, exchanges have also taken measures. Due to the state of the market, Binance has stopped performing automatic conversions from USDC to BUSD. Over the weekend, the cryptocurrency exchange Coinbase has chosen to halt USDC: USD conversions.

According to Ripple CTO David Schwartz, the business planned to make a formal statement in response to inquiries about whether it had any contact with the troubled SVB.