On Saturday morning, after the stablecoin-managing company Circle announced that $3.3 billion of the approximately $10 billion cash reserves backing USDC was held by the SVB. USD Coin, $0.87 dropped to a record low.
As The Guardian points out, this decline is unprecedented. As a stablecoin, the value of USDC was supposed to remain stable thanks to its pegging to the US dollar. According to data from CoinGecko, of USDC The previous all-time low was around $0.97 in 2018. More recently, after the collapse of the currency Three Arrows Capital for $0.99 fell. At the time of this writing, USDC is worth about 0.95 US cents.
previously people were arguing that USDC had only lost its peg on the less deep exchanges (kraken, gemini)
down just about everywhere now. going to be a rough weekend, i think. pic.twitter.com/4BCW6Lael9
— Molly White @ SXSW (@molly0xFFF) March 11, 2023
USDC stablecoin breaks dollar peg after Silicon Valley Bank collapse
Creator of Web3 “Going Just Great” Molly White suggests that the impact of a sustained USDC drop would be “enormous.” FRAX And DAI A handful of other stablecoins use USDC as collateral. On Friday, Circle said more about what will happen to SVB’s customers. more It said it will “continue operating normally” while awaiting information. “Thursday From the day of, we started the transfer of these funds to other bank partners. Although these transfers have not yet been settled as of business closure on Friday, FDIC’s SVB We trust him to manage his situation and we are ready to receive these funds.”
Circle He added on Saturday that $5.4 billion of its cash assets are held by BNY Mellon, “one of the largest and most stable financial institutions in the world.”