Circle has $3.3 billion in Silicon Valley Bank; Coinbase and Binance suspend USDC transactions;Circle burned 650 million USDC in the last 24 hours!
Blockchain payment technology company and USD Coin issuer Circle confirmed that remittances initiated the previous Thursday to clear balances to have yet to be processed, with $3.3 billion of $40 billion USDC reserves stuck in Silicon Valley Bank (SVB).
Circle’s assets remain with Silicon Valley Bank
Circle’s last audit revealed that as of January 31, $8.6 billion, or roughly 20 percent, of its reserves were held at various financial institutions, including the recently bankrupt Silvergate and the shutdown SVB. However, after this news, concerns about USDC started to increase.
In order to provide transparency on the subject, Circle made a statement on its official Twitter account:
“After confirmation that remittances initiated on Thursday to clear balances have not yet been processed, $3.3 billion of approximately 40 billion USDC reserves remained in the SVB.”
According to CoinGecko data, USDC in particular was surprised by the dollar constant before the announcement and was at 0.98. Immediately after that, this figure fell to the level of $ 0.93.
The California agency has appointed the FDIC as the buyer to protect insured deposits, although the exact reason for the shutdown remains unclear. It is also worth noting that it is a company that has provided financial services to various crypto-focused venture firms, including SVB, Andreessen Horowitz, and Sequoia, one of the 20 largest banks in the US by total assets.
Coinbase and Binance suspend USDC transactions
Almost 30 minutes after Circle’s last announcement, Coinbase has added yet another woe to USDC by announcing that it’s temporarily suspending USDC:USD transactions over the weekend while banks are closed.
The statements from Coinbase were in the direction of “During periods of increased activity, USD transfers from banks during normal banking hours are taken as a basis for processing. We plan to restart transactions when banks open on Monday.”
However, on the same day, Binance also announced on Twitter that the exchange has temporarily suspended automatic conversion of USDC to BUSD due to current market conditions, particularly with high inflows and increased load to support the conversion.
Circle burned 650 million USDC in the last 24 hours!
USDC, which fell as low as $ 0.88, experienced fluctuations in its 100 percent support position, which it has often emphasized.
According to on-chain data, after this drop, USDC burned 649.3 million USDC. According to the detail shared by Nansen, this action, which helped bring the price back to the level of $ 0.97, has reduced the effect of the depeg.
Circle burns 650M USDC in last 24 hours, price closes to peg
Circle’s USDC, or USD Coin, has been around for a long time as a stablecoin pegged to the value of the US dollar. The most critical issue of the stable, created by Circle, a fintech company that offers payment and digital currency solutions, is undoubtedly 100 percent backed by dollars.
Built on the Ethereum blockchain, the project is widely used mostly in decentralized finance (DeFi) applications and other crypto exchanges. It provides users with a stable and secure way to transfer value without the volatility of other cryptocurrencies. In addition, Circle suggests that it has implemented robust regulatory and compliance measures to ensure transparency and trust in the USDC ecosystem.
However, these claims can be said to have been tested with the recent depeg.
So much so that after the crisis experienced by the SVB, USDC, which experienced a depeg, took its price up to $ 0.88.
According to the latest data provided by on-chain data provider company Nansen, Circle, which burned approximately $650 million in 24 hours, is actively working to peg the price again.