USDC, the second largest stablecoin, has lost its peg and is currently trading at 90.6 cents to the dollar. It follows the revelation by issuer Circle that $3.3 billion of USDC’s reserve assets were held at Silicon Valley Bank (SVB). On Friday, the California regulator put the bank under the control of the Federal Deposit Insurance Corporation (FDIC) following Thursday’s attempts by SVB clients to withdraw $42 billion, or around a quarter of the bank’s deposits.
It appears Circle was one of the clients that attempted a withdrawal on Thursday that didn’t go through. The stablecoin’s price has recovered from a low of 87.6 cents three hours ago.
Circle keeps around 25% of its reserves in cash at six banks, with the balance mainly in a bespoke money market fund holding Treasuries and managed by Blackrock.
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