USDC bounces back toward $1 peg after Fed announcement

Circle’s stablecoin, USD Coin (USDC), said CEO Jeremy Allaire said its reserves were safe and the company has new banking partners lined up to “start banking tomorrow morning.” After confirming that it is back to the $1 peg.

According to CoinGecko dataUSDC has risen 3.3% over the past 24 hours to $0.99 at the time of writing.

USDC price chart. Source: CoinGecko

Prices fell to $0.87 over the weekend amid concerns that $3.3 billion worth of USDC reserves were held at Silicon Valley Bank (SVB), which was shut down by the California Department of Financial Protection and Innovation on March 10. Did.

Circle also has an undisclosed reserve in the recently bankrupt Silvergate.

In a March 12 Twitter thread, Allaire praised the US government and the Federal Reserve for a $25 billion funding program to help liquidity-challenged banks such as SVB.

“100% of USDC reserves are also safe and secure, completing the transfer of the remaining SVB cash to BNY Mellon. It will resume in time.”

Allaire said that after the collapse of crypto-friendly Signature Bank on March 12, Circle could no longer handle USDC issuances and redemptions through SigNet, and the company was temporarily “reliant on settlements through BNY Mellon. I will,” he added.

The CEO outlined that it will move quickly in this regard, revealing that Circle “could bring in new transaction banking partners with automated minting and redemption as early as tomorrow.”

Following statements from Allaire and the Fed’s announcement, the cryptocurrency market capitalization is now over $1 trillion after plummeting to $961 billion on March 11, with asset prices across the board. has risen significantly.

Assets such as Bitcoin (BTC), Ether (ETH), Cardano (ADA), Polygon (MATIC), and Solana (SOL) jumped 10.6%, 11.4%, 12.3%, 11.7%, 15.1% over the last 24 hours. rose to 1 person.

In particular, this is despite signing banks collapsing.

Signing is considered the last crypto-friendly bank in the United States, following the closure of Silvergate and SVB, and it is unclear what the major bank’s on and off ramp to crypto is.