Circle CEO: SVB Collapse Came During Bank Transition Period For USDC

Anvesh Reddy
March 15, 2023
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Circle CEO Jeremy Allaire described the recent banking crisis in the United States as ‘dramatic’ and ‘challenging’. He said panic emerged in the market last week and manifest in closure of banks and the Federal Deposit Insurance Corporation (FDIC) stepped in. The CEO said liquidity crisis in the macro environment emerged due to asset imbalances with rising interest rates. Despite USDC’s depegging issues when the banking crisis began last week, the stablecoin is now almost back to $1 value while the crypto market saw one of the biggest rallies in recent times that took Bitcoin price to its highest level since June 2022.

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Circle Was In Bank Transition When SVB Was Closed

Allaire said his company began to work with the Bank of New York Mellon, which holds $24 trillion of assets. In the wake of all the FUD around Silvergate Capital, Circle began moving cash into the Bank of New York Mellon on 9 March 2023, the Circle CEO explained. But immediately after this, the Silicon Valley Bank was seized by California regulators, effectively blocking $3.3 billion in USDC reserves in the failed bank. He added that stablecoins need to be strictly supervised to prevent any negative market effects.

Allaire said legislation around stablecoins should be able to provide foundational backing and payment system access. Supervision should ensure better reserves and a model to allow new companies to come in to the crypto ecosystem. The USDC price is now at $0.99 currently.

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Anvesh reports major crypto updates around U.S. regulation and market moving trends. Published over 1400 articles so far on crypto and blockchain. A proud dropout of University of Massachusetts, Lowell. Can be reached at [email protected] or x.com/BitcoinReddy or linkedin.com/in/anveshreddybtc/
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.