USDC stablecoin issuer Circle has confirmed that it has reclaimed 100% of its reserve held by the troubled Silicon Valley Bank (SVB). The company’s CEO disclosed this in a tweet on Monday, noting that the deposits are safe and will be available when the bank opens.
Circle Reclaims $3.3B USDC Reserve
Circle CEO Jeremy Allaire disclosed that the firm recovered the funds courtesy of a crucial intervention by the U.S. government and financial regulators. Allaire also stated that the remaining funds held by SVB would be transferred to the Bank of New York Mellon (BNY Mellon), another leading U.S. financial institution.
Recall that Circle confirmed it had $3.3 billion of its reserve stuck in Silicon Valley Bank after the financial institution went underwater last week. The exposure compromised USDC’s parity with the US dollar, and the stablecoin crashed to a low of $0.88.
Circle also confirmed that the Silvergate shutdown would force it to find a new banking partner to facilitate its USDC minting and redemption. The stablecoin company relied on Silvergate’s payment network to mint USDC but will now work with BNY Mellon until it finds a new partner.
According to Allaire, Circle will partner with a new bank to confirm its USDC transactions as early as Monday, and the company will also start liquidity operations for the stablecoin.
USDC Regains Dollar Peg, Circle Offers Airdrop
Following the update by Circle, USDC regained its dollar peg. The stablecoin was trading at $0.99 at press time, recovering from its price capitulation earlier.
The USDC depeg caused a frenzy in the market as investors feared a Terra repeat. Exchanges were forced to halt the conversion of USDC due to increased activity on the stablecoin. However, the stablecoin has rebounded and hopes to maintain the peg.
In a bid to shrug off the negative impact of USDC’s recent disarray, Circle has decided to reward the token holders with gifts. The company will distribute USDC to customers with its airdrop feature.
The airdrop is valid for 12 hours and requires users to provide their wallet details or scan a QR code to claim the free token.
Meanwhile, SVB’s closure also affected a few other crypto firms, including BlockFi, which had $227 million in its mutual fund investment. But these companies will likely recover their funds as the U.S. government has assured SVB depositors that they will get all their money back on Monday.
