Spooked investors rushed to cash out of USD Coin, the second-largest stablecoin, after regulators closed Silicon Valley Bank.
Circle Internet Financial Ltd. has $3.3 billion of its USD Coin reserves tied upThe USD Coin reserves remaining at Silicon Valley Bank comprise about 8% of the roughly $40 billion in assets backing the token, according to Circle.
Spooked investors rushed to cash out of USD Coin, the second-largest stablecoin, after regulators closed Silicon Valley Bank on Friday in theUSD Coin fell from its $1 peg to below 94 cents early on Saturday morning, according to data from CoinDesk. It recovered slightly to trade around 95 cents. Cryptocurrency investors redeemed more than $2 billion in Circle’s stablecoin in the past 24 hours, according to blockchain data provideras of 10 p.m. ET on Friday. The pace of USD Coin redemptions accelerated through Friday, with most of the USD Coin burned in the last eight hours, Nansen said.
“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 said in a tweet late Friday. Stablecoins such as USD Coin have become integral to cryptocurrency trading over the past two years. Traders prefer to buy and sell coins such as bitcoin using stablecoins, rather than using more volatile digital tokens or waiting days for trades made with government-issued currencies to settle.
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