Circle CEO and co-founder Jeremy Allaire confirmed that as of March 13, the stablecoin issuer had “access” to its $3.3 billion in funds held at the collapsed Silicon Valley Bank (SVB).
In an interview with Bloomberg Markets on March 14, Allaire said he believed “if not everything, almost everything was able to be cleaned up” from the failed lender.
USD coins (USDC) — stablecoin issued by Circle — short tied following messages that its cash reserves were $3.3 billion stuck to SVB.
Pegged stablecoin dollar has since recoveredbut bulk buybacks of USDC have driven the stablecoin’s market cap down nearly 10% since March 11, according to TradingView.
Meanwhile, over the same time frame, USDC peer Tether (USDT) has seen its market capitalization rise slightly, up more than 1% to $73.03 billion since March 11.
Related: USDC debugged for Silicon Valley Bank, but won’t default
The temporarily locked funds had a significant impact on USDC, as the $3.3 billion represented less than 8% of the token’s reserves according to its January reserve. message released on March 2.
We can never be sure with cryptocurrencies, but it seems to be fine.
8.25% of Circle’s reserves are stuck… 91.75% of their funds remain liquid. Even in the event of a complete loss of funds, Coinbase steps in to make sure #USDC
The market reaction seems to be just total panic driven by the news… https://t.co/vs1junbFys
— tedtalksmacro (@tedtalksmacro) March 11, 2023
The report claimed that the USDC was more than 100% collateralized with more than 80% of the reserve consisting of short-term United States Treasury bills – highly liquid assets that are direct obligations of the US government and considered one of the safest investments in the world.