Circle CEO able to access $3.3B of USDC reserves held at Silicon Valley Bank

Circle CEO and co-founder Jeremy Allaire has revealed being able to access the $3.3 billion held at collapsed Silicon Valley Bank (SVB). In a video with Bloomberg Markets on March 14, the stablecoin issuer's executive said that he believed that "if not everything, very close to everything, was able to clear" from the collapsed lender on March 13.

Circle's USDC depeg on SVB woes

Following the news that SVB had collapsed with $3.3 billion of Circle's cash trapped, the company's stablecoin USD Coin (USDC) briefly de-pegged from the dollar. Consequently, cryptocurrency whales registered severe losses and embarked on a series of capital flights to protect their remaining assets.

In a Twitter post, crypto exchange Huobi Global's co-founder Du Jun said: 

[I] dodged LUNA, dodged 3AC, even dodged FTX [and their collapse], but I couldn't avoid Silvergate, nor SVB and USDC. Asked a few crypto veterans; losses amounted to >$1 billion in stock and deposits, myself included. I'm very upset, and it's time to cut down on my budget.

However, the stablecoin has restored its dollar peg, although mass redemptions have caused a significant drop in USDC's market capitalization. Based on CoinMarketCap data, the USDC market cap is down almost 10% since March 11 and around 3% in the last 24 hours to $38.39 billion.

USDC market cap

Tether market cap soars as network mints $2 billion USDT

Meanwhile, USDC industry rival Tether (USDT) has recorded a notable increase in market cap in the last 24 hourse, recording a 1% gain to $73.03 billion. This comes after the network minted $2 billion USDT tokens anticipating future demand.

The minting took place on Ethereum and TRON blockchains on March 15, catapulting Tether’s market cap 3.5% from $72.1 billion to $74.6 billion between March 12 and March 14. The network’s market capitalization leaped $7 billion since the onset of 2023, rising from $66 billion.

Tether’s CTO Paolo Ardoino has clariefied the purpose for minting, saying the amount would serve as “inventory for next period issuance requests and chain swaps.”

USDT marketcap

Based on the above representations, USDC was affected by the brief lock-up of funds at SVB. According to the January reserve report released on March 2, the $3.3 billion was barely 8% of the stablecoin's reserves. Nevertheless, the situation cost USDC its market share to an industry competitor.

The report assured that USDC was 100% collateralized, with more than 80% of the reserve comprising short-dated US Treasury Bills.

Because of the recent catastrophes in the crypto and financial playing fields, highly liquid assets with direct obligations of the US government have passed as the safest investments worldwide.