U.S. company Circle announced on March 14 that its $3.3 billion USDC reserve deposit, which had been held at the collapsed Silicon Valley Bank, would be fully available when U.S. banks opened on March 13. Circle CEO Jeremy Allaire confirmed the news on Twitter, stating that operations for USDC would resume and that the company’s new partnership with Cross River Bank would facilitate automated settlement.
Following the implosion of crypto-friendly Signature Bank on March 12, Circle will temporarily rely on settlements through BNY Mellon until it brings on a new transaction banking partner. Allaire expects this to happen soon, possibly as early as March 15.
USDC reserves are secure
Allaire praised the U.S. government and Federal Reserve’s $25 billion funding program, which supports liquidity-troubled banks such as SVB, and assured Circle customers that 100% of USDC reserves are safe and secure. He also revealed that the company would transfer its remaining SVB cash to BNY Mellon.
Also Read: Circle CEO Argues Stablecoins Should be Regulated by Banking Authorities
The recent news about USDC reserves stuck at the bankrupted Silvergate had caused concerns, and the market had reacted adversely, with the total crypto market cap dropping to $961 billion on March 11. However, Allaire’s statement, coupled with the Federal Reserve’s announcement, sparked a significant rally in asset prices. In the past 24 hours, Bitcoin, Ether, Cardano, Polygon, and Solana have surged by 10.6%, 11.4%, 12.3%, 11.7%, and 15.1%, respectively, pushing the total crypto market cap above $1 trillion.
Signature Bank had been seen as the last crypto-friendly bank in the U.S. following the closure of Silvergate and SVB. Its collapse has raised concerns about the availability of major banking on-and-off ramps into crypto. However, the market seems to have shrugged off the news, and investors remain optimistic about the future of crypto.
