USD Coin Defies Gravity And Returns To $1 Peg After Nail-Biting Weekend

Zinger Key Points
  • USD Coin returns to $1 peg with new banking partners.
  • Circle to transfer remaining SVB cash to BNY Mellon and find new transaction banking partner.

Stablecoin USD Coin USDC/USD, issued by Circle, is gradually returning to its $1 peg, after a tumultuous weekend, after CEO Jeremy Allaire confirmed that Circle's reserves are secure and the firm has found new banking partners who will be operational on Monday.

USDC's value has risen by 4.5% in the past 24 hours and is currently trading at $0.995, according to CoinGecko data.

However, the coin's value dropped as low as $0.87 over the weekend amid concerns about $3.3 billion worth of USDC reserves held by Silicon Valley Bank SIVB, which was shut down by the California Department of Financial Protection and Innovation on March 10.

See Also: Feds Rescue Depositors Amid SVB Bank Collapse

Allaire recently praised the U.S. government and Federal Reserve on Twitter for their $25 billion funding program, which is designed to support banks facing liquidity issues.

Allaire also confirmed that Circle's USDC reserves are safe and secure and that the firm would complete its transfer for the remaining SVB cash to BNY Mellon BK.

Circle would soon have a new transaction banking partner with automated minting and redemption, potentially as soon as the following day.

The announcement from Allaire and the Federal Reserve has resulted in a significant asset price surge across the market, with a surge in the values of Bitcoin BTC/USD and Ether ETH/USD and the total crypto market cap rising above $1 trillion.

This increase occurred despite the collapse of Signature Bank, which was considered the last crypto-friendly bank standing in the U.S. after the closure of Silvergate and SVB.

Next: Unstoppable Crypto Heists? 41 DeFi Platforms Fall Victim To Deadly Art Of Oracle Manipulation

Image by Pete from Pixabay

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Posted In: CryptocurrencyNewsTop StoriesFederal ReserveMarketscrypto market capcrypto-friendly banksJeremy AllaireLiquidity IssuesSignature BankStablecoin
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