Circle, the American startup behind the USDC stablecoin, the world’s second-largest stablecoin, has provided its community with facts regarding its business operations.
Circle stated (1) in a blog post published on March 14 that it had resumed its usual activities, which include the repayments of the USDC stablecoin. This information was made public.
The week before last was a pivotal one for Circle because it was not only shaken by the failings of the two core financial partners for the cryptocurrency ecosystem, Silvergate Bank & Signature Bank.
It also had its finances tied up on Silicon Valley Bank (SVB), which was closed by regulatory agencies in the week before last.
A terrifying unpegging of the stablecoin was spurred by the events that transpired and the inability to access USDC deposits to fulfill redemptions.
The asset, meant to be pegged 1:1 to the US Dollar, sank as low as $0.8 last week, creating panic throughout the industry.
The sector is still suffering from the collapse of the TerraUSD (UST) stablecoin, which took place in May of last year after its protocol was interfered with by actors who have yet to be named.
The price of the TerraUSD (UST) stablecoin dropped dramatically.
The first version of the Terraform Labs came to an end due to the de-pegging of UST at the time, which contributed to the collapse of the stablecoin and ended the Terraform Labs dynasty.
As a result of Circle’s ability to facilitate a speedy recovery for the USDC stablecoin after its de-peg, the industry as a whole was quite pleased with the company.
While this article is being written, the spot price of the stablecoin is now sitting at $0.9992, and it has a market value of $38.4 billion.
The speedy rebound of USDC can also be credited, at least in part, to the work of Center, a coalition of Web3.0 enterprises encouraging the stablecoin ecosystem and including Coinbase Global Inc.
The New Banking Route of the USDC and the Circle
Circle has revealed that it has begun executing its refund through a new banking partner following its success in gaining access to the monies worth $3.3 billion that was previously locked up in Silicon Valley Bank.
As per Circle, the bulk of its USDC assets now held in cash have been moved to be domiciled with the Bank of New York Mellon Corp (BNYM).
The company stated that most of its reserves are kept in highly liquid investments; nevertheless, it did affirm that it is still looking for dependable banking partners.
According to the statement, “most of the reserve is invested in the Circle Reserve Fund, managed by BlackRock and held at BNYM. The Circle Reserve Fund is largely comprised of short-dated US Treasuries.”