Depegging of USDC and DAI Saves Borrowers $100 Million

The depegging of USD Coin (USDC) and Dai (DAI) from the US dollar resulted in more than $2 billion in loan repayments on decentralized lending protocols Aave and Compound, with borrowers saving a total of over $100 million. USDC and DAI started heading back toward their peg, and repayment activity tapered off in the following days.

Timeline of Usd-coin

Circle USDC News: In the wake of the devastating effect the failure of Silicon Valley Bank and Signature Bank had on the US markets, Circle CEO Jeremy Allaire gave the latest update on the state of affairs. The crypto market went bullish this week as the SVB related contagion spread through the US financial sector.

As investors sought safety in the wake of Silicon Valley Bank's (NASDAQ: SIVB) collapse this week, the total Tron (CRYPTO: TRX) stablecoin market cap saw a significant increase, while the Ethereum (CRYPTO: ETH) stablecoin market cap fell.  What Happened: Data from DeFilama shows that Justin Sun-owned Tron reached over 50% levels of the total circulating stablecoins on Ethereum.

Circle The CEO of USDC, Jeremy Allaire, stated on Twitter that the organization's reserves are “safe and secure,” and that liquidity activities will continue when U.S. banks open on Monday.

After assurance from CEO Jeremy Allaire that its reserves are secure and the company has new banking partners lined up for “banking open tomorrow morning,” Circle's stablecoin USD Coin (USDC) is climbing back to its $1 peg. The value of USDC is currently $0.99, up 3.3% over the last day, according to data from CoinGecko.

All cryptocurrencies' market capitalization has surpassed $1 trillion once again. The damaged cryptocurrency market turned green after a joint statement from the Federal Reserve, U.S. Treasury, and FDIC stated that all depositors of the now-shuttered Silicon Valley Bank and Signature Bank will be allowed to get their monies out on Monday.

Massive redemptions for Circle's USDC stablecoin continued on Monday, March 13, after the weekend panic and de-peg in the stablecoin. As per blockchain researcher Nansen, over $1.74 billion of USDC stablecoins were redeemed on Monday.

A “desperate” cryptocurrency investor has paid well over $2 million in an on-chain trade to swap out of an investment offering them exposure to $USDC and the decentralized stablecoin $DAI and into $USDT, but only received $0.05 in return.

Following the announcement last night by federal regulators that all deposits at Silicon Valley Bank (NASDAQ:SIVB) would be guaranteed, Circle CEO issued a statement on the company's dollar-based stablecoin, USDC, as any risk was eliminated from Circle's relationship with SVB.

Circle's dollar-based stablecoin USDC lost its dollar peg last week after the firm revealed that $3.3 billion in reserves were locked up at Silicon Valley Bank (NASDAQ:SIVB). At one point, USDC dropped by around 12% as holders ran for the exits.

A March 12, 2023, joint statement by the Department of the Treasury, Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) advised that depositors for both the Signature Bank, New York and Silicon Valley Bank, Santa Clara, California, will have access to their money effective March 13, 2023.