Following its exposure to the demise of Silicon Valley Bank, the Circle USDC stablecoin has reclaimed its peg and is presently trading at $1.
recovery of the stablecoin following last week's bank disaster. In the meantime, depositors who were impacted by the SVB closure now have access to funds after the Federal Reserve declared that it will compensate them all in full.
One of the most alarming financial industry developments in recent years is the closure of Silicon Valley Bank. The US government is nevertheless taking action to shield depositors from any potential repercussions of the worst financial failure since 2008.
The value of the Circle-issued stablecoin crashed on Friday after customers learnt about the company's exposure to SVB Financial. The business admitted to keeping about $3.3 billion—or about 8% of the total funds—in the now-closed bank as support for USDC.
Since 90% of the money held in Silicon Valley Bank was not insured, the sale of SVB's assets by the FDIC will result in a dividend paid to uninsured depositors.
Circle USDC stablecoin has reclaimed its peg and is currently trading at $1, in part due to Federal Reserve action. Yet, the demise of Silicon Valley Bank continues to be a major source of worry for the financial industry, and steps are being taken to shield depositors from the consequences of the situation. It's a good thing that the FDIC sold SVB's assets since it will give uninsured depositors some relief.