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Stablecoin USD Coin (USDC) lost its dollar peg and hit an all-time low on Saturday after Circle, the U.S. firm behind the coin, revealed that some of the reserves backing it were held at Silicon Valley Bank.
Circle has $3.3 billion of its $40 billion of USDC reserves at collapsed lender Silicon Valley Bank, the company said in a tweet on Friday.
The coin broke its 1:1 dollar peg and fell as low as $0.88 in the morning on Saturday and slighly recovered to $0.90 by midday.
The depeggin is a result of the Silicon Valley Bank collapse, which occured on Friday. It s being touted as the largest U.S. bank failure since the 2008 financial crisis.
Circle said in a tweet on Friday that it and USDC "continue to operate normally" while the firm waits for clarity on what will happen to Silicon Valley Bank depositors.
Silicon Valley Bank is one of six banking partners Circle uses for managing the ~25% portion of USDC reserves held in cash. While we await clarity on how the FDIC receivership of SVB will impact its depositors, Circle & USDC continue to operate normally.https://t.co/NU82jnajjY
— Circle (@circle) March 10, 2023
