Researchers from the Federal Reserve Banks of New York and Boston published an analysis of how Circle restructured USDC’s reserve assets following the failure of Silicon Valley Bank (SVB) in March 2023. The issuer notoriously had $3.3 billion deposited at the bank, resulting in a de-peg of its stablecoin.
The Fed analysis identifies four changes to Circle’s reserves after SVB. The weighted average maturity (WAM) of the Circle Reserve Fund (CRF) fell sharply, from above the median for a money market fund (MMF) to among the shortest of any Treasury only MMF. The authors conclude that this reduced Circle’s interest rate risk exposure.
The fund’s reverse repurchase agreement holdings surged from zero to over 90% of net assets before settling at 69%. Reverse repo involves lending cash, usually overnight, in exchange for Treasury collateral. Within that repo book, centrally cleared sponsored repos grew to 77% by the fourth quarter of 2025. Circle’s bank deposits, meanwhile, shifted toward GSIBs while declining substantially as a share of total reserves. Before the SVB collapse, cash made up 20% to 25% of reserves, but since 2024 has hovered between 12% and 15%.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
