The United States regulators for the USDC stablecoin issuer, Circle, have shifted a tiny amount of their USDC reserve deposits held at the struggling Silvergate Bank to its other banking partners.
In a press release dated March 4, 2023, Circle revealed this information to the public. In the announcement, Circle said that the decision was made because of the persistent unpredictability at the bank. In addition, the issuer of USDC noted that the safety of reserve money supporting USDC was its primary concern, even if doing so meant winding down its connection with Silvergate.
Circle Withdraws from Silvergate
Throughout the previous year, Circle initiated the withdrawal operations in response to Silvergate Bank’s increased visibility of indicators of concern and more extensive crypto asset risk exposure.
In addition, the issuer of the stablecoin said that all USDC reserves are stored in several US institutions with sufficient capitalization, in addition to the Circle Reserve Fund, which presently accounts for around 80% of the total USDC reserves. Furthermore, a renowned accounting and consulting company on a worldwide scale, Deloitte, now conducts monthly audits on the total amount of these reserves and certifies their accuracy.
CoinMarketCap, a portal that monitors the cryptocurrency market, places USDC fifth among the top cryptocurrencies in market cap. According to the certified treasury statement that can be seen on Circle’s website, the ratio of the company’s USDC reserve to its total supply is precisely one-to-one.
On Friday, a cryptocurrency hedge fund known as Digital Asset Capital Management (DACM) announced that it would be seeking help from banks in Switzerland. DACM had previously had a working connection with Silvergate Banks.
DACM Seeks Swiss Partners
Richard Galvin, the co-founder of DACM, said that certain banks process cryptocurrency transactions, but, in contrast to Silvergate, these banks are not crypto-focused. So finding a banking partner may take some time. They are having conversations with a few banks in Switzerland.
Examples are Swiss financial firms Sygnum Bank AG and SEBA Bank AG which deal with digital assets.
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