After a period of uncertainty, Circle, issuer of the USDC stablecoin, has recognized a large exposure of its funds within the bankrupt Silicon Valley Bank. It is thus a total of 3.3 billion dollars of its cash intended to support the heart of the USDC which is impacted by a financial event whose consequences are for the moment impossible to assess.
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Circle’s significant exposure in the Silicon Valley Bank bankruptcy
The news fell in the night and showered the hopes of those who thought that the exposure (and the damage) would be a little more limited. Circle has made known the reality of the amounts held by Silicon Valley Bank, which has recently been declared bankrupt. And these are substantial.
“1/ Following confirmation at the end of the day that transfers initiated on Thursday to withdraw balances have not yet been processed, $3.3 billion of the $40 billion in USDC reserves remain at SVB. »
$3.3 billion is nearly 8% of the entire USDC capitalization. A very substantial amount, even for a crypto giant like Coinbase.
In the aftermath, the exchange did know that the platform suspended USDC>USD conversions, in order to avoid a disastrous effect of serial liquidations and a potential bank run phenomenon. Exchanges on chain remain possible, however, although it should be noted that the USDC is experiencing a significant depeg in its value at the time of writing (with a low point of $0.91 reached around 4am French time).
Last Verdict
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