SNEAK PEEK

• USDC operations will officially open for business on Monday morning.
• USDC depegged on the US dollar as contagion from the failure of Silicon Valley Bank spread.
• The signature bank would also be closing its doors.

Circle, a leading global financial technology firm that provides payment and cryptocurrency solutions, has announced that its USDC operations will officially open for business on Monday morning. As part of this, Circle is partnering with Cross River Bank to introduce automated settlement capabilities for USDC transactions.

Reportedly, this revelation comes after USDC, the second-largest stablecoin with a market valuation of $42 billion, depegged from the United States dollar as contagion from the failure of Silicon Valley Bank spread.

To put this into perspective, Circle, the company that issued USDC tied to the US dollar, said that $3.3 billion of the total $40 billion worth of the stablecoin in reserves was still being kept at Silicon Valley Bank (SVB). This revelation was a shock, given that early projections suggested that the bank would have little more than one billion dollars in reserves.

However, according to Jeremy Allaire, the CEO of Circle, 100% of deposits from SVB are secure and will be available at the bank. The CEO added:

We will complete our transfer for the remaining SVB cash to BNY Mellon.

Moreover, the Chief Executive Officer mentions that normal liquidity activities for the stablecoin USDC will resume on Monday morning.

Nevertheless, since it was reported yesterday that Signature Bank would be closing its doors, Circle would no longer be able to handle minting and redemption over SigNet. Instead, Circle will depend on settlements conducted through BNY Mellon.

In conclusion, Jeremy Allaire believes that enshrining stablecoin funds with cash at the Fed and short-term T-Bills is crucial for a safe financial system. The Payment Stablecoin Act, which Congress is actively pursuing, would create a legal framework for this regime, and Allaire believes this law is needed now more than ever.

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• Source: https://investorbites.com/circle-and-cross-river-bank-to-resume-usdc-transactions-on-monday/