$3.3 Billion of USDC Reserve Risk Removed, Dollar De-peg Closes

Circle also announced automated USDC minting and redemption for customers via new banking partners that go live this week.

March 13, 2023  - Following the joint announcement by U.S. Treasury Secretary Janet Yellen and U.S. prudential regulators, all depositors with Silicon Valley Bank and Signature Bank, which was closed by regulators, will be made whole. 

The $3.3B USDC reserve deposit held at Silicon Valley Bank, about 8% of the USDC total reserve, will be fully available when U.S. banks open this morning. No USDC cash reserves were held at Signature Bank. As a regulated payment token, USDC remains redeemable 1:1 with the U.S. Dollar.

"Trust, safety and 1:1 redeemability of all USDC in circulation is of paramount importance to Circle, even in the face of bank contagion affecting crypto markets," said Jeremy Allaire, Co-founder and CEO of Circle. "We are heartened to see the U.S. government and financial regulators take crucial steps to mitigate risks extending from the banking system. We've long advocated for full-reserve digital currency banking that insulates our base layer of internet money and payment systems from fractional reserve banking risk."

On March 11, 2023, Circle shared details about the USDC reserve, stating it is currently collateralized 77% ($32.4B) with short-dated U.S. Treasury Bills. U.S. Treasury Bills are the most liquid assets in the world and are direct obligations of the U.S. government. These reserves are held in custody by BNY Mellon and active liquidity and asset management is done by BlackRock. The cash portion of the USDC reserve, 23% ($9.7B), is now held primarily at BNY Mellon. c