Scrutiny Falls on $43B USDC Stablecoin’s Cash Reserves at Failed Silicon Valley Bank


Circle’s USDC, the second largest stablecoin with $43 billion market capitalization, held an undisclosed part of its $9.8 billion cash reserves at failed Silicon Valley Bank.

U.S.-based stablecoin issuer Circle held a part of its USDC stablecoin’s cash reserves at Silicon Valley Bank of Jan. 17, according to the firm’s latest attestation.

USDC is the second-largest stablecoin on the market with a $43 billion circulating supply, fully backed by government bonds and cash-like assets.

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According to Circle’s January reserve report, the firm held some $9.88 billion of cash deposited at regulated banks to back USDC’s value. USDC’s banking partners included Silicon Valley Bank (SVB), the California-based bank that was taken over by regulators and shut down on Friday.

The full list of banks that held cash for Circle’s USDC are Bank of New York Mellon, Citizens Trust Bank, Customers Bank, New York Community Bank (a division of Flagstar Bank, N.A.), Signature Bank, Silicon Valley Bank and Silvergate Bank. Circle also keeps some part of USDC reserves in a dedicated Blackrock fund.

Circle last week said that it had cut ties with Silvergate Bank, the crypto-friendly bank that halted operations and said it would “voluntarily liquidate” its assets earlier this week.

Signature Bank’s shares have dropped 12% on the news about SVB’s shutdown. Signature said in December that it would reduce deposits tied to crypto firms by as much as $10 billion.

Circle did not return a request for comment about the firm’s exposure to SVB and Signature Bank at press time.

The recent failure of crypto- and tech-focused banks investors has rattled investors, causing crypto markets to crash. Bitcoin (BTC), the largest cryptocurrency by market capitalization, fell below the psychologically important $20,000 level, the lowest since January.CRYPTOCASTER® - DECENTRALIZED FREEDOM!
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