- The CEO of Circle announces the commencement of its USDC operations.
- It will have new features thanks to its partnership with Cross River Bank.
- The Twitter crypto space shows skepticism due to the state of the current banking sector.
Co-Founder and CEO of Circle, Jeremy Allaire, says Circle will open its USDC operations this week. Starting Monday morning, Circle’s USDC operations will begin. It will be accompanied by a new automated settlement thanks to Circle’s partnership with Cross River Bank.
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According to the tweet Allaire made above, it seems the Twitter crypto community has mixed responses. One in particular highlights how Cross River has the same banking model as Silicon Valley Bank. This could bode as troubling news considering how SVB just went under.
In the thread, Allaire adds an update. He says the Circle team is heartened to see how the US government and financial regulators are taking big steps to mitigate risks during the current turbulent situation in the banking industry. He says that 100% of deposits from SVB have been made secure and will be available.
On March 12, 2023, the closure of Signature Bank by regulators resulted in the removal of $3.3 billion of risk from the USDC reserve, which was held at Silicon Valley Bank. This represents approximately 8% of the USDC total reserve, but as a regulated payment token, USDC remains redeemable 1:1 with the US Dollar.
All depositors with Silicon Valley Bank and Signature Bank will be made whole, and the USDC reserve deposit held at Silicon Valley Bank will be fully available when US banks open the following morning.
Circle, the company responsible for USDC, is also announcing automated USDC minting and redemption for customers via new banking partners that will be launched later in the week. Circle emphasizes the importance of trust, safety, and 1:1 redeemability of all USDC in circulation, even in the face of bank contagion affecting crypto markets.
The USDC reserve is currently collateralized 77% with short-dated US Treasury Bills, while the remaining 23% is held primarily at BNY Mellon. Monthly USDC attestation reports, including the latest report from January 2023, are available on Circle’s website in the Trust & Transparency section, and anyone can view the entire liquidity ladder down to the CUSIP number on T-Bills via the USDXX ticker. Circle has long advocated for full-reserve digital currency banking to mitigate risks extending from the banking system.
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