Over the weekend, concerns arose over $3.3 billion worth of USDC reserves being held at Silicon Valley Bank, which was shut down by the California Department of Financial Protection and Innovation on Mar. 10. As a result, USDC lost its peg and dropped to as low as $0.87. However, Circle CEO Jeremy Allaire took to Twitter on March 12 to announce that 100% of USDC reserves were safe and secure and that all operations would resume at banking open on Monday.
Circle Collaborates with New Banking Partner
To mitigate future risks, Circle has strengthened its relationship with the Bank of New York Mellon and revealed that Cross River Bank will be the new partner for USDC operations, including automated settlement. Although the implosion of Signature Bank caused a stir in the crypto market, assets like Bitcoin, Ether, Cardano, Polygon, and Solana have all experienced significant pumps following Allaire’s announcement.
USDC Regains Peg
At press time, USDC had regained its peg and was trading at $0.998. The recent drama surrounding the Silicon Valley Bank and USDC had raised concerns about Circle’s banking partners. However, Circle has moved quickly to establish new partnerships and assure customers that their USDC reserves are safe and secure.
After a challenging weekend that resulted in Circle’s USDC stablecoin losing its peg to the US dollar, the company has expanded its relationships with other banking partners to assist with USDC redemption. This includes Bank of New York Mellon (BNY Mellon), which already provides custody services for Circle’s reserves. Following a series of moves by banks and regulators, confidence in USDC was restored, and the stablecoin has regained its peg. Currently, USDC is trading at $0.99.
