On Saturday, March 11, 2023, Circle Financial updated on its stablecoin, USDC, noting that liquidity operations for the stablecoin will resume successfully Monday morning in the United States Circle noted that the company’s team “will be working on a new stablecoin for the US dollar on Monday morning. Circle said its team is ready to “handle a significant amount” on Monday and that the company will “support USDC, use company resources to cover any shortfalls, and enlist outside capital as needed.”
Circle Financial Confident in USDC’s Stability Despite SVB Failure
Circle Financial, issuer of usd coin (USDC), the second largest stablecoin by market capitalization, gave a public speechon Saturday, noting that it will be “prepared to handle significant volume” on Monday. He also highlighted the collapse of Silicon Valley Bank (SVB) and USDC’s “strong liquidity and reserve assets.” On Monday, the issuer of the stablecoin said that “USDC remains redeemable at 1:1 against the US dollar.” He noted.
usd coin (USDC) is a 24/7 crypto asset on various blockchains, but Circle stressed that “issuance and redemption are constrained by the working hours of the U.S. banking system.” Circle’s stablecoin USDC will be issued on Saturday, March 11, 2023 ) at 3:02 a.m. ET to a low of $0.877 per unit. After the announcement from the Circle, USDC managed to rise 10%, and at 4:15 p.m., this stablecoin was swapped at $0.971 per coin.In addition to USDC, five other stablecoin assets deviated from $1 parity on Saturday.
Circle said that $3.3 billion in USDC cash reserves are held at SVB, but that the company has begun transferring funds to other banks and is “confident in the FDIC’s management of the SVB situation and ready to receive these funds.” In addition, the stablecoin issuer noted that “under applicable FDIC policy, there is reason to believe that the transfers, which were initiated before the bank went into receivership, would have otherwise been successfully processed.” The Circuit continued.
In other words, the FDIC should be allowed to settle transactions in the normal course until the end of the bank’s standard daily processing cycle, until the FDIC takes control of the failed institution.
However, Circle addresses the negative scenario that the SVB may not become whole and it may take longer for the company to return. Circle emphasized that if that were to happen, it would still support the stabled coins to be issued.” In such an event, Circle will stand behind [USDC], as required by law under the Stored Value Money Transmission Regulation, and will cover any shortfall with company resources, including outside capital if necessary.” The company’s update concludes.
image credit: Shutterstock, Pixabay, Wiki Commons.
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