Will Circle be Able to Restore Stability to USDC After Signature Bank Failure? 

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.

Timeline of Usd-coin

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.

Jeremy Allaire, CEO and co-founder of Circle, on Sunday thanked the U.S. government and financial regulators for their decisive action to address the risks associated with the fractional banking system.  What Happened: Circle's USD Coin (CRYPTO: USDC) is climbing back to its $1 peg, following confirmation from its CEO Allaire, that its “USD reserves remain safe” and the firm has new banking partner Cross River Bank (NASDAQ: CSRVF).

The financial sector has endured a few chaotic days. In particular, for USDC stablecoin and Silicon Valley Bank and its stakeholders, since the lender swung from being presumed robust and profitable to being shut down by authorities in less than 48 hours.

The stablecoin USDC has nearly regained parity with the U.S. dollar after rising just above $0.99 on March 12, 2023, at 7:20 p.m. Eastern Time. The stablecoin jumped back to the $0.99 range after the U.S. Federal Reserve revealed it would bail out depositors of California's Silicon Valley Bank (SVB) and New York's Signature Bank.

Circle Internet Financial's $3.3 billion cash reserves problem was seemingly solved Sunday when federal regulators promised that depositors of failed Silicon Valley Bank would be made whole in short order. But Circle's USDC stablecoin isn't out of the woods.

On Sunday (March 12), the crypto market had a great to reason to cheer after U.S. Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg released a hugely important joint statement.

Ripple (XRP) dips along with other altcoins, after the USDC stablecoin takes a massive hit and de-pegged from its $1 price value.  Ripple's CTO expresses serious concerns over the downfall of SVB, while announcing that Ripple will issue a statement concerning its exposure to the bank.

Circle, the issuer of the stablecoin USD Coin (USDC), has announced that it will use corporate resources to cover the shortfall on its reserves after Silicon Valley Bank (SVB) was shut down by the California Department of Financial Protection and Innovation. USDC liquidity operations will resume as normal when banks open on Monday, enabling redemption at 1:1 with the US dollar.

On March 10, concerns about the solvency of USD Coin (USDC) led several holders to panic sell their holdings and switch to other stablecoins. One user lost over 2 million USDC in a failed attempt to exchange them for Tether (USDT) using KyberSwap's decentralized exchange aggregator.

Key Points: Binance, the world's largest cryptocurrency exchange by trading volume, has announced the launch of a new perpetual contract for USD Coin (USDC) with up to 30x leverage on its Binance Futures platform.