- Circle to cover shortfall if SVB doesn't return $3.3b cash reserve
- Currently, 1 USDC is trading for $0.97
Circle Internet Financial, the issuer of stablecoin USDC, has assured it will “cover any shortfall” if Silicon Valley Bank proves unable to return their $3.3 billion cash reserve in its entirety.
Crypto market went haywire over USDC value
The promise came as crypto investors panicked over the value of USDC, which lost its peg to the US dollar late Friday on news of the major bank’s collapse. The FDIC seized the assets of the bank, which is holding the $3.3 billion.
Currently, 1 USDC is trading for $0.97 on Coinmarketcap data. Circle wrote in a blog post:
They added that the FDIC should allow settlement as normal until it takes control of SVB, drawing attention to the possibility that the transfers initiated on Thursday would be processed on Monday.
Circle stated that SVB had a solid franchise that was at the heart of American tech industry and entrepreneurship growth. They hope that under receivership terms, the FDIC will find an equally strong franchise to buy SVB and ensure deposit wholeness.
Circle will stand behind USDC
Circle conceded that SVB might not return the funds in full or that the process could be delayed. If this happens, Circle will back USDC and “cover any shortfall” using their own funds, including external ones if necessary.
