Scrutiny Falls On $43 Billion USDC Stablecoin's Cash Reserves At Failed SVB

Krisztian Sandor writes via CoinDesk: U.S.-based stablecoin issuer Circle held a part of its USDC stablecoin's cash reserves at Silicon Valley Bank as of Jan. 17, according to the firm's latest attestation (PDF). USDC is the second-largest stablecoin on the market, with a $43 billion circulating supply that is fully backed by government bonds and cash-like assets. According to Circle's January reserve report, the firm held some $9.88 billion of cash deposited at regulated banks to back USDC's value. USDC's banking partners included Silicon Valley Bank (SVB), the California-based bank that was taken over by regulators and shut down on Friday. The full list of banks that held cash for Circle's USDC are Bank of New York Mellon, Citizens Trust Bank, Customers Bank, New York Community Bank (a division of Flagstar Bank, N.A.), Signature Bank, Silicon Valley Bank and Silvergate Bank. Circle also keeps some part of USDC reserves in a dedicated BlackRock fund. Circle said last week it had cut ties with Silvergate Bank, the crypto-friendly bank that halted operations and said it would "voluntarily liquidate" its assets earlier this week. Signature Bank's holding company's (SI) shares have dropped 12% on the news about SVB's shutdown. Signature said in December that it would reduce deposits tied to crypto firms by as much as $10 billion. Simon Dixon, CEO of online investment platform BnkToTheFuture, tweeted that Circle's chief executive Jeremy Allaire said the firm held "most of their cash is in BNY Melon," while sharing a screenshot from March 2. BnkToTheFuture is an investor and shareholder in Circle.

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