Circle says $3.3B of USDC reserves stuck at Silicon Valley Bank

• Circle said it failed to remove $3.3 billion from Silicon Valley Bank.
• SVB is under FDIC receivership following its collapse.
• USDC depegged following the news, falling 8% to hit lows of $0.91 on Saturday morning.

Circle, the blockchain payments company that issues the USDC stablecoin, has confirmed that $3.3 billion worth of USDC reserves are stuck at the troubled Silicon Valley Bank.

The latest cryptocurrency news around USDC comes after crypto markets sank on Thursday amid the collapse of SVB and Silvergate Bank.

USDC depegs as Circle confirms $3.3 billion SVB exposure

In a tweet late Friday, Circle noted that efforts to remove its balances from the bank had failed on Thursday, meaning $3.3 billion of the stablecoin’s cash reserves remain at the bank.

“Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB,” the firm noted.

In a follow up tweet as it confirmed the exposure to the collapsed bank, the firm noted:

“Like other customers and depositors who relied on SVB for banking services, Circle joins calls for continuity of this important bank in the U.S. economy and will follow guidance provided by state and Federal regulators.”

Circle had earlier disclosed that SVB was one of six banking partners that held roughly 25% of the cash reserves for USDC. That includes Signature Bank and Silvergate Bank that recently announced it was liquidating.

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.

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Even as sentiment veered south, Circle had noted that it continued to “operate normally,” hinting that it was waiting for clarity on the impact of SVB’s FDIC receivership on depositors before providing more details.

But with uncertainty rising, USDC lost its dollar peg, falling more than 8% to lows of $0.91 early Saturday.

“A black swan failure in US banking system”

Dante Disparte, the Chief Strategy Officer & Head of Global Policy at Circle, also commented on the unfolding events, noting that the company was “protecting USDC from a black swan failure in the US banking system.”

“[SVB] is a critical bank in the US economy and its failure – without a Federal rescue plan – will have broader implications for business, banking and entrepreneurs,” he added.