Circle Announces $3.3 Billion USDC Reserves Will Be Available Shortly
Circle was also caught off-guard when Signature Bank and Silicon Valley Bank collapsed. According to reports, the cryptocurrency firm had $3.3 billion worth of USDC reserves at the Silicon Valley Bank.
But after the collapse of SVB, there were fears that the Circle's deposit would also go under and could present some serious trouble for the company. However, the recent announcement by the Circle as well as the US regulators, should be enough for the Circle's customers to feel at ease.
System Crisis In US Banking Sector Was Averted
After the failure of two US-based banks, the US administration stepped in and introduced various measures to rectify the issue. So far, the US administration has succeeded in restoring the public's confidence in the US banking system.
The recent announcement of my Circle was also in the same regard, as it also had some reserves at one of the affected banks.
For now, it appears that the US authorities have managed to avert a system crisis that had the potential to shake up the entire financial system.
Circle made it clear that it didn't have any USDC-based cash reserves with the Signature Bank. They also ensured that its token reserves were fully redeemable with a ratio of 1:1 with the US Dollar.
The crypto firm also announced a redemption and minting process of USDC that will be carried out automatically. For that purpose, the company will be using the Cross River Bank. In addition, it also revealed that it had relationships with other banks such as well such as BNY Mellon.
According to Circle's CEO, the company's USDC operations will remain open and the new partnership with a bank will also help with automated settlement.
The recent crisis has also revealed a rather ugly truth about the crypto ecosystem... The BTC was introduced after the financial crisis but a lot of crypto firms are still tied very closely to the conventional banking system.