SVB Collapse Meant Protecting 'a Digital Dollar From the Banking System': Circle CEO

In a recent interview, Circle's CEO pointed out the irony of a traditional bank disrupting the wider crypto industry.

“We are really trying to make sure that we’ve got the most solid infrastructure possible for [USDC], and it’s somewhat ironic that there has been a lot of talk of protecting the banking system from crypto, here we are in a situation where we are trying to protect a digital dollar from the banking system,” Allaire told CNBC.

Jeremy Allaire praised the Federal Reserve and the U.S. government for their $25 billion funding program to assist banks like SVB that were experiencing liquidity issues, yet, he still finds the situation Circle found itself in quite extraordinary.

Though USDC has edged back to its dollar peg, he said Circle was prepared to intervene amid the recent chaos and use its corporate balance sheet if needed.

Fortunately, that was not needed. Still, Allaire said in a recent interview that he was “very confident” in the firm's ability to do that.

“We took a lot of precautions late last week as we started to see a lot of things unfold. We’ve moved all of our reserve assets to the Bank of New York Mellon, which is an extraordinary custodian,” he said.

Last week’s shutdown of Silicon Valley Bank (SVB) by the California Department of Financial Protection and Innovation has raised concerns about the $3.3 billion in USDC reserves held there.

As a result, the price of USDC plummeted to a low of $0.87 over the weekend.

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...

Circle resumes operations as normal

Circle’s exposure to SVB accounted for about 8% of the total $42.1 billion cash reserves underpinning the value of USDC before Monday, with the company minting nearly half a billion dollars in USDC yesterday.

The Boston-based company also said that the $3.3 billion USDC reserve deposit held at SVB is now fully available, reiterating that “as a regulated payment token, USDC remains redeemable 1:1 with the U.S. Dollar.”

Investor Mints $407.8M in USDC as Stablecoin Recovers Dollar Peg

Those looking to stablecoin issuer Circle as crypto’s next fire sale may have to look elsewhere.  At the time of writing, Circle’s U.S. dollar-pegged stablecoin has almost regained its full value after dropping 13% on Saturday. It currently trades for around $0.99, according to data from market aggregator CoinGecko.  Another key indicator that market confidence in Circle may be returning is the fact that early Monday morning, Circle minted nearly half a billion dollars in USDC, according to on-c...

Circle also announced automated USDC minting and redemption for customers via new banking partners that are going live this week.

One of those partners tapped by Circle, according to Allaire, is Cross River Bank, a New Jersey-based financial services organization that provides technology infrastructure to fintech and technology companies, including America’s largest crypto exchange Coinbase.