Nansen Says Story Not Over for USDC as Institutional Money Exits

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.

Timeline of Usd-coin

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.

Fissures among the progressive left are primarily responsible for the lack of U.S. regulatory progress around stablecoins, says John Rizzo, senior vice president for public affairs at Clyde Group.

Circle has minted hundreds of millions of dollars worth of US Dollar Coin (UDSC) as the second-largest stablecoin by market cap recovers from its recent depegging from the dollar. USDC, a stablecoin designed to stay pegged to the value of one US dollar, fell in value to as low as $0.

USDC stablecoin issuer Circle has a staggering $3.3 billion of its total reserves with the Silicon Valley Bank. Circle has promised to cover any shortfall using corporate resources as well as external capital if required.

USDC and other cryptocurrencies were having a rough trading session Monday following an announcement from U.S. authorities outlining measures to minimize the impact of the collapse of Silicon Valley Bank. Concerns regarding Circle's $3.3 billion in USDC reserves held at SVB, which was shuttered by the California Department of Financial Protection and Innovation on March 10, drove the price of the stablecoin down to as low as $0.87 over the weekend.

In fact, the US dollar itself is not exchangeable on the blockchain, but it is possible to create tokens that have the exact same value as the dollar and are exchangeable on the blockchain. These special cryptocurrencies are called stablecoins.

Circle's stablecoin USD Coin (USDC) was regaining its $1 peg, at press time. This followed after CEO Jeremy Allaire confirmed that its reserves were secure and that the company had new banking partners lined up for banking beginning Monday morning.

The collapse of Silicon Valley Bank (SVB) on March 10 has caused ripples in the crypto industry, leaving many investors anxious about the exposure of major players like Circle, the issuer of the popular stablecoin USDC. With $3.

Circle, a leading player in the crypto industry, has been impacted by the recent failures of Silicon Valley Bank and Signature Bank. The collapse of Signature Bank, a critical financial institution for the industry, has left a major hole in the industry's backend infrastructure.

On March 11th, Silicon Valley Bank (SVB), the bank that held $3.3 billion of USDC reserves, was shut down by the California Department of Financial Protection. This led to a drop in the price of the stablecoin below its $1 peg, with it trading as low as $0.87.