Stablecoin issuer Circle and Silicon Valley bank have been all over the headlines over the weekend. With the California authorities ordering the closure of the bank and Circle’s revelation that $3.3 billion is still with SVB, USDC was prey to the repercussions. USDC, which is supposed to maintain its peg despite the market volatility, plummeted to $0.8774 amidst the chaos.
Following the slew of events, Circle even released a blog stating that it would cover any shortfall created due to the fall of the Silicon Valley bank. The stablecoin issuer also went ahead and assured that 100% of the USDC reserves are safe. The CEO of Circle also addressed the issue on Twitter and stated that they would transfer the remaining cash from SVB to BNY Mellon.
However, the stablecoin drama over the weekend seems to have settled. This is evident in the recent spike in the value of USDC.
USDC repegs amidst the bank chaos
According to the latest data from CoinMarketCap, USDC has repegged. USDC is trading at $0.9993, as it slightly dropped in value after reaching $1. USDC is one of the largest stablecoins out there, and the weekend drama had its negative effects throughout the stablecoin realm. The Circle issues definitely alerted several exchanges, including Binance, Robinhood, and Coinbase, as they took quick measures to halt the trade activity amidst high volatility.
While 2022 proved to be catastrophic for the largest players in the cryptocurrency realm, 2023 is proving to be the same for traditional banks. With the fall of cryptocurrency-friendly banks including Silvergate and Silicon Valley Bank, 2023 is proving to be a tough year for the traditional financial market.