Circle's USD Coin (USDC) stablecoin is returning to its $1 peg following confirmation from CEO Jeremy Allaire that its reserves are safe and that the firm has new banking partners lined up in "open banking tomorrow morning." .
According to CoinGecko dataUSDC is up 3.3% in the last 24 hours to settle at $0.99 at the time of writing.
The price dropped to as low as $0.87 over the weekend. amid concerns over $3.3 billion in USDC reserves which is held at Silicon Valley Bank (SVB), which was shut down by the California Department of Financial Protection and Innovation on March 10.
Circle also has an undisclosed amount of reserves stuck in the Silvergate recently bankrupt.
In a March 12 Twitter thread, Allaire praised the US government and the Federal Reserve for their $25 billion funding program to support liquidity-challenged banks like SVB:
โUSDC's 100% reserves are also secure and we will complete our transfer of the remaining cash from SVB to BNY Mellon. As previously shared, liquidity operations for USDC will resume at bank open tomorrow morning.โ
Update thread on USDC
We were encouraged to see that the US government and financial regulators took crucial steps to mitigate the risks that spread from the fractional banking system.
100% of SVB deposits are safe and will be available tomorrow in open banking.
โ Jeremy Allaire (@jerallaire) March 12, 2023
Allaire added that after the Crypto-friendly Signature Bank implosion on March 12, Circle is no longer able to process USDC minting and redemption through SigNet, and that the company will "temporarily be dependent on deals through BNY Mellon."
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