Circle Clears Nearly All Minting And Redemption Backlog For USDC
The issuer of the USDC stablecoin, Circle, has stated that it has cleared “substantially all” of the redemption and minting requests for USDC.
The announcement comes after the issuer revealed that it had around $3.3 billion worth of stablecoin reserves with SVB, prompting a bank run.
USDC’s Silicon Valley Bank Exposure
USDC, the stablecoin issued by Circle, lost its dollar peg last week, falling to a record low on Saturday after it emerged that the company held significant capital at the now-collapsed Silicon Valley Bank.
According to a statement by Circle, it held 8% of its $40 billion in reserves at the defunct bank. As a result of the news, USDC, which typically maintains a value of $1 thanks to its dollar peg, fell to around 87 cents.
“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.”
Authorities and regulators shut down SVB bank and seized its deposits as the bank revealed it would need to raise an additional $2.25 billion to prop up its balance sheet.
Nearly All Redemption And Minting Requests Cleared
As a result of its disclosure, Circle was hit by a bank run as USDC lost its dollar peg. In an update issued on the 15th of March, the company stated that between the morning of the 13th of March and the close of business in the United States on the 15th of March, it had redeemed $3.8 billion USDC and minted $0.8 billion USDC. This, according to Circle, meant that it had all of the redemption and minting requests for USDC. The company stated in its update,
“As of close of US banking operations Wednesday, the 15th of March, we have cleared substantially all of the backlog of minting and redemption requests for USDC. Since Monday morning, Circle has redeemed $3.8 billion USDC and minted $0.8 billion USDC. The events of the past week have impacted the liquidity operations for USDC. Circle has worked tirelessly to re-initiate services with alternative banking partners, particularly payment and USDC redemption services. We would like to thank our customers for their patience during these unprecedented times.”
New Banking Partner In Place
Circle also stated that it had gone live with a new banking partner for US transfers on the 14th of March. It added that the same banking partner facilitated international wires to and from other countries on the 15th of March, adding that it would onboard more capabilities by the 16th. Circle’s new banking partner, Cross River Bank, is also Coinbase’s banking partner for redeeming and minting USDC on the 13th.
Additionally, the company also expanded its ties with the Bank of New York Mellon (BNY Mellon). The announcement comes at a testing time for USDC, which caused several crypto whales to suffer significant losses as users looked to flee from what was viewed as a depreciating asset. One user ended up paying $2 million in the mad dash to cash out of the crash.
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