Crypto giant Circle survived a heartbreaking weekend which saw its flagship stablecoin USDC break its peg to the dollar, falling below 90 cents early on Saturday before a series of moves by banks and regulators restored confidence in the token. By midnight on Sunday, the USDC had rallied and was trading at near exact parity with the US dollar.
On Sunday evening, Circle released a Press release confirming that $3.3 billion in SVB deposits – which were part of the reserves that back the USDC coin – were safe and that the token remains redeemable 1:1 with the dollar.
The company also announced that it has added Cross River Bank, known for providing banking services to people like Visa, Coinbase and fintech companies – as a new commercial banking partner for the purposes of minting and redeeming USDC. Circle also announced other “extended relationships” for USDC redemptions, including BNY Mellonwhich already provides custodial services for the company’s reserves.
Circle’s announcement also noted that it had no exposure to Silvergate, a crypto-friendly bank that announced on Sunday that it would. voluntarily liquidate its holdings as part of a takeover process by federal regulators.
The USDC turmoil over the weekend was part of a wider financial conflagration caused by the shocking collapse of Bank of Silicon Valley (SVB), which was the sixteenth largest bank in the country and a financial mainstay in the world of technology and venture capital. SVB’s failure sparked a panic as thousands of companies, including Circle, were unable to access billions in deposits. On Sunday, the Federal Reserve and other agencies calm markets by announcing depositing with SBV would be returned whole.
In Circle’s case, the upshot of all this is that the company appears to have weathered the weekend slump and sought to further minimize risk by strengthening ties with major financial institutions. In addition to its deep ties to BNY Mellon, Circle also relies on the asset management giant black rock to manage transactions related to its USDC reserves.
FortuneThe CFO Daily newsletter is the must-have analysis every finance professional needs to get ahead. register today.