USDC stablecoin issuer Circle has claimed that it will “cover any shortfall” caused as a result of the $3.3 billion in its funds held by the collapsed Silicon Valley Bank.
In a blog post, Circle wrote that the company is legally obliged to “stand behind” USDC and will cover any shortfall using corporate resources—and "external capital if necessary"—to ensure that the stablecoin can be redeemed at a ratio of 1 for 1 with the U.S. Dollar. CEO Jeremy Allaire reiterated the commitment in a Twitter thread.
On Friday, USDC lost its peg to the U.S. dollar following a bank run on Silicon Valley Bank and the disclosure that $3.3 billion in USDC’s cash reserves was held by the bank that the FDIC had taken over.
Sharing an Update on USDC and Silicon Valley Bank. https://t.co/Ug3qpot8sJ
— Jeremy Allaire (@jerallaire) March 11, 2023
Overnight USDC fell to $0.87, its lowest point since 2019, before regaining ground to currently trade at $0.95, according to CoinGecko.
Circle’s collateralization
Circle reiterated its claim that USDC is 100% collateralized with cash and U.S. Treasuries.
“USDC is currently collateralized 77% ($32.4B) with U.S. Treasury Bills (with a three month or less maturation period), and 23% ($9.7B) with cash held at a variety of institutions, of which SVB is only one,” Circle wrote.
Circle says the remaining 23%, around $9.7 billion, is in cash, and Circle deposited $5.4 billion with BNY Mellon to “reduce bank risk.” The company says that Consumer Bank holds another $1 billion in USDC reserves, adding that Circle maintains transaction and settlement accounts for USDC with Signature Bank.
“$3.3bn of USDC’s cash reserves remain with SVB,” Circle said. “As of Thursday, we had initiated transfers of these funds to other banking partners. Though these transfers had not yet been settled as of close of business Friday, we remain confident in the FDIC’s management of the SVB situation and stand ready to receive these funds.”
While Circle and USDC’s troubles stem from Silicon Valley Bank, the company added that USDC has zero exposure to collapsed crypto-friendly bank Silvergate, saying the company transferred the “limited reserves” the company had at Silvergate before the bank closed.
Waiting for Monday
As the contagion from the collapse of Silicon Valley Bank continues to spread, Circle noted that while USDC is on-chain, U.S. banking hours constrain its issuance and redemption, adding that USDC liquidity operations will resume “as normal” when banks open on Monday.

USDC Stablecoin Falls to 87 Cents After Circle Discloses Exposure to Silicon Valley Bank
US Dollar Coin, the No. 2 stablecoin by market cap, designed to remain always priced at $1, is currently trading at 91 cents, according to data on both CoinMarketCap and CoinGecko. It fell as low as 87 cents overnight, below its prior all-time-low of 89 cents in May 2019. On Saturday morning, it had begun to recover. The depegging happened after Circle, the issuer of USDC, disclosed on Friday night that some $3.3 billion worth of the cash reserves that back USDC remain held at Silicon Valley Ban...
“As a practical matter, our teams are well prepared to handle significant volume, built on the strong liquidity and reserve assets discussed below,” Circle wrote, adding that it believes the FDIC will allow transfers begun before Silicon Valley Bank entered receivership to process as normal.
“We are hopeful that the FDIC as receiver will seek a rapid purchase and assumption of a franchise as strong as SVB’s to ensure all depositors are made whole,” Circle said.