The stablecoin USDC nearly regained parity with the US dollar after rising slightly above $0.99 on March 12, 2023 at 19:20 ET. The stablecoin bounced back to the $0.99 level after the Federal Reserve revealed it would bail out depositors at California’s Silicon Valley Bank (SVB) and New York’s Signature Bank.After the Fed’s announcement, Circle CEO Jeremy Allaire said on Twitter that the company would mint and redemption process and will rely on BNY Mellon to settle the redemption process, he said.
With the closure of Signature Bank, Circle will
rely on BNY Mellon to settle USDC mintages and redemptions.
On Sunday, March 12, 2023, at 8:45 PM Eastern time, the stablecoin usd coin (USDC) jumped over the $0.99 level at around 7:20 PM and is trading at $0.998 per unit. Three minutes after stablecoin returned to the $0.99 level, Circle CEO Jeremy Allairetweeted that USDC operations would resume on Monday
The announcement follows the Federal Reserve’s announcement that it has established a backstop entity called the Bank Term Funding Program (BTFP) to help banks facing liquidity problems. The US central bank also stated that all depositors of Silicon Valley Bank (SVB) and Signature Bank will be fully compensated.
In other words, Circle Financial will not lose any funds to bail out depositors through the bailout, but Circle will lose its banking partners with Signature, which was closed by New York regulators.
Alere said in a statement, “We are heartened that the U.S. government and financial regulators have taken significant steps to mitigate the risks spreading from the fractional banking system.” All deposits from SVB are 100% secure and will be available at the opening of banking tomorrow.”
Aleaadded:
Also, 100% of USDC’s reserves are safe and we will complete the transfer of SVB cash to BNY Mellon. As previously shared, USDC’s liquidity operations will resume tomorrow morning when the bank opens for business.
Circle’s CEO also commented on the Signature Bank issue, as Circle had previously used their Signet service to facilitate payments between USDC and USD Signature Bank Signet service is similar to Silvergate Bank’s now-defunct SEN network.” With the closure of Signature Bank announced tonight, we will no longer be able to process minting and redemption through Signet. We will rely on payments through BNY Mellon,” Allaire said in his Twitter statement.
In addition to USDC, several other top stablecoins, including DAI, USDD, USDP, GUSD, LUSD, and FRAX, also returned to the $0.99 level after being de-pegged over the past weekend.As of March 12, the stablecoin economy was valued at$135.85 billionAs of March 12, the stablecoin economy was valued at$135.85 billion. Market confidence in the stablecoin value. Morrove.
