Soon after USD Coin (USDC) issuer Circle revealed that it was unable to withdraw $3.3 billion from Silicon Valley Bank (SVB), the resulting sell-off sent the stablecoin’s price below the $1 mark.
On March 9, Circle initiated a wire transfer to remove funds from SVB as the Federal Deposit Insurance Corporation-insured bank was about to close operations. However, two days later, on March 11, Circle confirmed that the wire transfers had not been fully processed and that $3.3 billion in USDC reserves were still held by SVB.
Data from Cointelegraph Markets Pro and TradingView show that USDC prices fell immediately after the reveal, as shown below.
At the time of writing, USDC has lost over 10% of its value as it trades at $0.8774. According to Dante Disparte, chief strategy officer and head of global policy for the circle, SVB is critical to the US economy and “its failure – without a federal bailout – would have far-reaching implications for business, banking and entrepreneurs.
“As with Silvergate, our teams have worked quickly to limit any exposure to banks. This includes a wire transfer request made prior to SVB’s FDIC receivership. There is $3.3 billion in cash exposure – but we follow state and federal regulatory guidance.
More on-chain data expresses That circle redeemed $1.4 billion in USDC in 8 hours. In an effort to reduce exposure, crypto firms including Coinbase and Jump Trading repurchased approximately $850 million and up to $138 million in USDC.
Related: BREAKING: Circle Reveals $3.3B Raised in Silicon Valley Bank
Two weeks ago, on February 23, the USDC Issuer Circle announced plans to increase its staff by 25%.
During the timeline, Circle’s Chief Financial Officer Jeremy Fox-Jean shared their intention to go public, but plans to wait for better market conditions. He said the crypto sector needs more distance from the Terra and FTX implosions for public market investors to reassess the future of digital-asset businesses.