Silicon Valley Bank (SIVB), the lender that was shut down by regulators earlier in the day after seeing a run on deposits, still had $3.3 billion in cash deposits, according to stablecoin issuer Circle on Friday night. The amount is about 8% of the entire reserves supporting USDC, Circle’s stablecoin.
One of Circle’s six banking partners, Silicon Valley Bank, held some of the reserve assets backing its $40 billion USD stablecoin.
The second-largest stablecoin currently available and a key component of the cryptocurrency ecosystem is USDC. Worried investors sold off almost $1 billion worth of USDC tokens on Friday, temporarily removing USDC’s dollar peg on some exchanges and severely destabilising Curve’s largest stablecoin swap pool.
At the time of publication, USDC, the biggest dollar-pegged stablecoin, dropped to 0.945 USDT on cryptocurrency market Kraken.
Circle is actively defending USDC against a “black swan failure in the U.S. banking system,” Circle’s chief strategy officer, Dante Disparte, tweeted late on Friday. Without a Federal rescue plan, “SVB is a crucial bank in the U.S. economy and its failure will have broader ramifications for business, banking, and entrepreneurs,” he continued.
