On Saturday, March 11, 2023, Circle Financial updated the public on its stablecoin, USDC, noting that stablecoin liquidity operations will resume as normal Monday morning in the United States. Circle said the company’s teams would be ready on Monday to “handle significant volume” and that the firm will “support USDC and cover any shortfalls using corporate resources, involving outside capital if necessary.”
Circle Financial confident in USDC stability despite SVB failure
Circle, the issuer of the second largest stablecoin by market capitalization, usd coin (USDC), he addressed the public on Saturday, noting that the firm will be ready on Monday to “handle significant volume.” The company discussed the failure of Silicon Valley Bank (SVB) and also emphasized the “strong liquidity and reserve assets” of the USDC. On Monday, the issuer of the stablecoin noted: “USDC will continue to be exchangeable 1 for 1 against the US dollar.”
While the usd coin (USDC) is a crypto asset that trades 24/7 on various blockchains, Circle emphasized that “issuance and redemption are limited by system working hours.” U.S. Bank”. Circle’s USDC stablecoin fell to a low of $0.877 per unit on Saturday, March 11, 2023 at 3:02 am ET. Following Circle’s announcement, the USDC managed to rally 10% higher, and as of 4:15 pm, the stablecoin was trading at $0.971 per coin. In addition to the USDC, five other stablecoin assets deviated from their $1 peg on Saturday.
Circle said that while SVB has $3.3 billion in USDC cash reserves, the company has initiated transfers of the funds to other banks, and remains “confident of the FDIC’s handling of SVB’s situation and stands ready to receive these funds. The stablecoin issuer further noted that he has “reason to believe that under applicable FDIC policy, transfers initiated before a bank entered receivership would have been processed normally.” Circle continued:
In other words, the FDIC must allow transactions to settle in the normal course through the end of a bank’s standard daily processing cycle until the FDIC takes control of the failed institution.
However, Circle addresses a downside scenario where SVB may not be complete and the return of the company may take time. Circle stressed that if that happened, it would still be behind the stablecoin it issues. “In such event, Circle will, as required by law under the Stored Value Money Transmission Regulation, support (USDC) and cover any shortfalls using corporate resources, involving outside capital if necessary,” the update to the statement concludes. company.
What do you think about Saturday’s stablecoin volatility and the recent Circle update? Share your opinion in the comments section below.
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