Circle’s USDC Cash Reserves Scrutinized as Silicon Valley Bank Fails
As regulators took over and shut down Silicon Valley Bank (SVB) on Friday, scrutiny fell on Circle’s cash reserves for its USDC stablecoin, which were held at the now-defunct bank as of January 17, according to Circle’s latest attestation. USDC is the second-largest stablecoin on the market, with a $43 billion circulating supply that is fully backed by government bonds and cash-like assets.
USDC’s Banking Partners Revealed
Circle’s January reserve report showed that the firm held some $9.88 billion of cash deposited at regulated banks to back USDC’s value. USDC’s banking partners included SVB, as well as Bank of New York Mellon, Citizens Trust Bank, Customers Bank, New York Community Bank, Signature Bank, and Silvergate Bank. Circle also keeps some part of USDC reserves in a dedicated BlackRock fund.
Concerns Over Exposure to Failed Banks
Circle has not yet commented on its exposure to SVB and Signature Bank, whose holding company’s shares dropped 12% on news of SVB’s shutdown. In December, Signature Bank announced plans to reduce deposits tied to crypto firms by as much as $10 billion. Circle had also recently cut ties with Silvergate Bank, which announced plans to “voluntarily liquidate” its assets.
Bitcoin Falls Below $20,000
The recent failure of crypto- and tech-focused banks, including SVB, has rattled investors and caused crypto markets to crash, with Bitcoin falling below the psychologically important $20,000 level, the lowest since January.
Source: CoinDesk
