Circle’s Stablecoin USDC Loses Value as the Silicon Valley Bank Gets Shut Down
In Brief
Silicon Valley Bank was closed by the California Department of Financial Protection on March 10.
Circle, the issuer of stablecoin USDC, held $3.3 billion of its reserves in SVB.
USDC lost value and is currently traded at $0.91 USD.
On Friday, March 10, the bay area Silicon Valley Bank was closed by the California Department of Financial Protection. A day before, approximately $42 billion were withdrawn by VC funds and their clients.
Circle, the issuer of stablecoin USDC, on Friday announced it has $3.3 billion out of $40 billion of its reserves in Silicon Valley Bank.
The company did not manage to revoke deposits from Silicon Valley Bank, and on Friday night, the stablecoin started losing its value. At the moment of writing, USDC is traded at $0.91. The stablecoin might get back to the value of USD, as Circle has secured funds and continues to operate normally.
It’s worth noting that cryptocurrency exchanges Coinbase and Binance suspended USDC conversions for the weekend.
Among the other companies that had exposure to the Silicon Vallery Bank are BlockFi, Avalanche, NFT creator Yuga Labs, and Proof. Many startups also had their funds deposited in Silicon Valley Bank. However, out of a significant amount, only $250,000 were secured. This means that numerous tech startups will have to shut down due to the collapse of SVB. According to Y Combinator CEO Garry Tan, the incident might bring the industry back by ten years.
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About The Author
Valeria is a reporter for Metaverse Post. She focuses on fundraises, AI, metaverse, digital fashion, NFTs, and everything web3-related. Valeria has a Master’s degree in Public Communications and is getting her second Major in International Business Management. She dedicates her free time to photography and fashion styling. At the age of 13, Valeria created her first fashion-focused blog, which developed her passion for journalism and style. She is based in northern Italy and often works remotely from different European cities. You can contact her at valerygoncharenko@mpost.io
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Valeria is a reporter for Metaverse Post. She focuses on fundraises, AI, metaverse, digital fashion, NFTs, and everything web3-related. Valeria has a Master’s degree in Public Communications and is getting her second Major in International Business Management. She dedicates her free time to photography and fashion styling. At the age of 13, Valeria created her first fashion-focused blog, which developed her passion for journalism and style. She is based in northern Italy and often works remotely from different European cities. You can contact her at valerygoncharenko@mpost.io
