NewsletterDid Circle Get A $3 Billion Credit Line From Coinbase To Get USDC Back To $1?
Crypto News: As more information about the tragic weekend of the USDC depeg continues to surface, the newest development in the wake of the failure of Silicon Valley Bank is the introduction of a credit line with a value in the multi-billion dollar range. It has been reported that Coinbase made a massive offer of $3 billion to Circle, the crypto company that issues the second-largest stablecoin in the world, USD Coin (USDC), in a bid to bring it back to its $1 peg.
Coinbase Allegedly Offered $3B Backstop
As the stablecoin lost its peg to the U.S. Dollar the previous week, Circle reportedly requested an emergency credit line in order to secure the continued stability of USDC — according to a report published by Fortune. The de-pegging event took place after Circle disclosed a $3.3 billion exposure to Silicon Valley Bank not long after the financial institution was taken over by the Federal Deposit Insurance Corporation (FDIC).
Read More: Top Crypto Projects With Upcoming Upgrades You Should Be Aware Of In 2023
According to reports, Coinbase had provided an emergency line of credit to Circle that would have guaranteed to cover the entire liquidity for USDC reserves and assured the stablecoin could be converted to U.S. dollars on Monday morning following Silicon Valley Bank’s failure. The companies were almost certain of revealing the credit facility, but on the same Sunday, banking authorities lifted the FDIC and alleviated the sense of trouble.
The USDC Depegging Fiasco
As reported earlier on CoinGape, Circle had planned transactions to move its deposits out of Silicon Valley Bank barely days before the regulatory authority ordered the bank to close its doors. The announcement that SVB was going to be defunct and Circle had cash that was stranded prompted considerable FUD among investors, who then hurried to withdraw their funds from the stablecoin.
As a direct consequence of this event, USDC de-pegged from the US Dollar, and for a short period of time, the stablecoin traded at a price lower than 90 cents. As things currently stand, the price of USDC is exchanging hands at its $1 peg with a market cap of $35 billion.
Also Read: Polygon Launches zkEVM-powered Web3 Gaming Network; MATIC Price Surge Ahead?
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.
Premium Partners
Delivered every day.
- Insights that move markets
- 100,000 active subscribers
Related Articles
- Cardano’s Charles Hoskinson Urges Traders to “Hold the Line” as Bitcoin Surges Back to $96K
- Binance’s CZ Vows U.S. Investment If DOJ Fine Is Reversed Following Presidential Pardon
- Shiba Inu Joins Bitcoin and Ethereum as Japan Approves SHIB for Green List Trading
- Experts Turn Bullish on XRP as Franklin Templeton ETF Launches on November 18
- Tom Lee Warns Bitcoin Drop Is From A Market Maker Hole, Says ETH Trend Unchanged
- Top Analysts Predict How Low Bitcoin Price Might Fall?
- Arthur Hayes Moves Millions: Is Ethereum Price About to Crash Below $3,000?
- Ethereum Price Outlook: Will Bulls Defend $3,000 Support Level?
- Litecoin Price: With a 12% Surge and Pearson BTC Correlation at –0.01, Is LTC Gearing Up for $125?
- What’s Next for Chainlink Price After 53.87 Million Tokens Accumulated
- What the New Bitcoin Model Predicts About a Possible $200K BTC Price Target?
