As part of a dedication to its customers, Circle’s Co-founder and CEO, Jeremy Allaire, stated that USDC liquidation operations will resume when banks reopen on Monday.
Notably, Circle has a $3.3 billion USDC reserve deposit held at the shuttered Silicon Valley Bank (SVB). However, the company reiterated in a press release that it had no cash reserves at Signature Bank, which was recently closed down by the US government.
On Sunday, Circle provided information about the USDC reserve, noting that it is now collateralized 77% ($32.4B) with short-dated U.S. Treasury Bills.
In a Twitter thread, Allaire stated that Circle’s 100% USDC reserve is safe and all outstanding SVB cash will be transferred to BNY Mellon. Additionally, he said Circle is now launching automatic USDC minting and redemption for users through new financial partners.
It should be noted that Circle previously employed SigNet for minting and redeeming; however, since SigNet has shut down, the company is looking for a new partner. Signet is a payment platform that allows for instant and secure transactions between customers of the bank.
The USDC Stablecoin Faces Threats
The USDC is built on the Ethereum blockchain and is designed to maintain a stable value relative to the US dollar. It allows users to transact with a stable value while still enjoying the speed, security, and low fees of cryptocurrency transactions.
USDC issuer, Circle announced on Sunday that it has exposures of $3.3 billion in cash deposits stuck in the embattled SVB. The amount is roughly 8% of the overall reserve supporting the USDC.
Following the announcement, a report has revealed that the USDC stablecoin is being sold at outrageous discount prices. For instance, one person dumped a significant number of 3CRV (DAI/USDC/USDT) into USDT in exchange for spending more than 2 million USDC to buy $0.05 worth of Tether.
It was also rumored that Justin Sun, the creator of Tron, has transferred funds to other stablecoins. He apparently withdrew 82 million USDC over the decentralized financial network Aave v2 and swapped it for Dai worth about $75 million.