SNEAK PEEK
- Circle’s $3.3B of USDC reserves held at Silicon Valley Bank, risking a $1.2B loss.
- Circle supports SVB’s participation in the US financial system, calling for regulatory guidance.
- SVB’s bankruptcy has caused a drop in the USDC/USDT and BUSD/USDT trading pairs.
Circle, the issuer of the US dollar-pegged stablecoin USDC, has revealed that $3.3 billion of the cryptocurrency’s $40 billion in reserves remain held at Silicon Valley Bank (SVB). This disclosure comes as a surprise, as initial expectations were that only $1 billion would be held at the bank.
1/ Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB.
— Circle (@circle) March 11, 2023
However, with an estimated 40% potential loss, Circle could be facing a loss of up to $1.2 billion due to the large amount of funds held at SVB. This update comes after reports emerged on Thursday regarding the initiation of wires to remove balances from the bank.
While the delay in processing these wires is still being determined, it highlights the challenges of managing such large volumes of digital assets. As a result, growing worries have been expressed recently over the likely demise of SVB, a significant participant in the US banking industry.
Nevertheless, Circle tweeted its backing for Silicon Valley Bank’s (SVB) continued participation in the US financial system. Further, Circle has merged with other consumers and depositors in appealing for regulatory advice to safeguard the stability and dependability of SVB’s banking services in light of recent developments.
Moreover, as a responsible stakeholder in the financial ecosystem, Circle has emphasized the importance of adhering to state and federal regulations to safeguard the interests of all stakeholders.
In relation, the imminent insolvency of Silicon Valley Bank has had an unanticipated rippling impact on the cryptocurrency industry, triggering a decline in the USDC/USDT trading pair on OKX to $0.973 and the BUSD/USDT trading pair on Binance to $0.9873.
These drops mark the lowest prices for both pairs since mid-April 2021, highlighting the volatile nature of the cryptocurrency market and the far-reaching impact of unexpected events.