• On Saturday, March 11, 2023, Circle Financial updated the public about its stablecoin, USDC and noted that the liquidity operations would resume normally on Monday morning in the United States.
• Circle noted that it will stand behind USDC and cover any shortfall using corporate resources and involving external capital if necessary.
• The company also discussed the failure of Silicon Valley Bank (SVB) but emphasized USDC’s strong liquidity and reserve assets.
Circle Issues Update Amid Stablecoin Volatility
On Saturday, March 11, 2023, Circle Financial updated the public about its stablecoin, USDC and noted that the liquidity operations would resume normally on Monday morning in the United States. The company stated it will be ready to “handle significant volume” and stands behind USDC to cover any shortfall using corporate resources, involving external capital if necessary.
Circle Confident in USDC Stability Despite SVB Failure
Circle discussed the failure of Silicon Valley Bank (SVB), but emphasized USDC’s strong liquidity and reserve assets with $3.3 billion held at SVB. Circle initiated transfers of these funds to other banks and is confident in FDIC’s management of this situation. However, a negative scenario could arise where SVB may not become whole and returns may take time; however, Circle still stands behind USDC for any shortfall if this were to occur.
USDC Drops Then Rises 10%
On Monday morning usd coin (USDC) was redeemable 1-for-1 with U.S Dollar as expected; however before then at 3:02 a.m ET on Saturday it dropped to a low of $0.877 per unit before rising back up 10% later in the day at 4:15 p.m., trading for $0.971 per coin instead. Other five stablecoins also deviated from their $1 parity during this time period too).
Circle Prepared To Cover Any Shortfall
Circle mentioned that it has “reason to believe,” under applicable FDIC policy “transfers initiated prior to a bank entering receivership would have otherwise been processed normally.” If this does not occur then Circle is prepared to cover any shortfall by using corporate resources and potentially external capital if necessary; ensuring customers are not left out of pocket or unable to access their money due to events beyond their control or understanding .
Overall it appears that despite some initial volatility over the weekend with six major stablecoins deviating from their $1 parity for various reasons including SVB’s failure ,Circle Financial remains confident in its ability provide services as normal with confidence in redeeming usd coin (USD) 1-for-1 with U.S Dollars by standing behind them financially should any issue arise , while still maintaining an open dialogue with customers throughout