The fallout from the failure of Silicon Valley Bank reached further into crypto, unhinging a key cog in the market that’s meant to be among the safest digital assets in the space.
USD Coin, or USDC, is an asset-backed stablecoin and a widely used plank of crypto markets. The token is intended to hold a constant $US1 value, fully backed by reserves of cash and short-dated Treasuries. But late Friday, Circle disclosed that $US3.3 billion of its roughly $US40 billion stockpile of reserves is held with Silicon Valley Bank, which has just become one of the largest US bank failures in recent history.
USDC had a circulating supply of around 40 billion tokens as of Saturday morning in New York, CoinGecko data shows. A net $US2 billion of USDC was redeemed in the past 24 hours, according to blockchain research firm Nansen. Data compiled by Bloomberg indicated USDC traded as low as US81.5¢. Wider crypto markets are having a painful week and were on the back foot Saturday: Bitcoin oscillated between gains and losses, while smaller tokens like Solana and Avalanche were in the red.