Reaper Financial, an Austin, Texas-based blockchain financial firm that specializes in buying and burning digital assets, has stated that it is changing the USDC in its Permanent DRIP Fund to XRP in the wake of the USDC depeg event.
In a tweet, the Ripple litigation plaintiff made a statement:
🚨NOTICE:
— Reaper Financial (@TheReaperCoin) March 11, 2023
Due to a potential de-pegging event the USDC in the Permanent DRIP Fund has been converted to $XRP until stability returns.
We will update as the situation evolves.$RPR $ASC $ARK $XRP $USDC pic.twitter.com/uGPHKXCXcb
A recent tweet from USDC issuer Circle disclosed that $3.3 billion of its $40 billion in USDC reserves are held by the troubled Silicon Valley Bank (SVB). In addition, The Bank is one of Circle's six banking partners that it employs to manage roughly 25% of its cash-based USDC reserves.
1/ Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB.
— Circle (@circle) March 11, 2023
As a result of investor redemptions, the USDC stablecoin no longer has a dollar peg. Investors have apparently cashed out USDC worth close to $8 billion on centralized exchanges over the last 24 hours.
USDC was trading at $0.903 at the time of writing, remaining below its dollar peg. The stablecoins DAI, USDD, and FRAX were trading below their dollar peg at the time of publication. Circle has burned $2.34 billion USDC over the past 24 hours, according to Nansen. According to it, the last eight hours saw a 70% increase in fires, or $1.65 billion.
In response to the recent situation, exchanges have also taken measures. Due to the state of the market, Binance has stopped performing automatic conversions from USDC to BUSD. Over the weekend, the cryptocurrency exchange Coinbase has chosen to halt USDC:USD conversions.
According to Ripple CTO David Schwartz, the business planned to make a formal statement in response to inquiries about whether it had any contact with the troubled SVB.
