By Curtis Dye
The recent failure of Silicon Valley Bank, which was one of the most significant bank failures in the history of the United States, is said to have caused a commotion in the cryptocurrency market after Circle Internet Financial disclosed that $3.3 billion of its USD Coin reserves were still held at the failed institution.
Uncertainty surrounds stablecoin
The exposure caused investors to react strongly to the news, which decreased the price of the USD Coin. Stablecoins, such as USD Coin and others, are intended to keep a 1:1 relationship with other highly liquid assets. On the other hand, the recent exposure of Silicon Valley Bank has rightly caused investors to be apprehensive.
Circle Internet Finance Ltd has around $8.7 billion in cash, most of which is kept in a BlackRock-managed money-market fund that invests in three-month Treasury bills and money. Several institutions, including Silicon Valley Bank, hold the remaining reserves, which account for 25% of the total. USD Coin has a roughly $40 billion circulating supply, making it the second-largest token behind Tether’s USDT.
Circle reassures amid exposure
Notwithstanding worries about its connection to the failed bank, Circle assured users its activities would continue as usual. Although other crypto firms denied involvement with Silicon Valley Bank, Circle said it was working on a response. Although the failure of Silicon Valley Bank has triggered tremors in the market, the future of stablecoins and their pegs to highly liquid assets remains questionable.
In related news, Bitcoin bulls are heroically trying to protect the $20,000 support level at any cost. Yesterday, this was brought to everyone’s attention as the bitcoin price dropped to $19,000 before rebounding to roughly $20,300. CoinGecko reports that the current price of one bitcoin, as of the time this article was written, is $20,463.59 USD.
At Tokenhell, we help over 5,000 crypto companies amplify their content reach—and you can join them! For inquiries, reach out to us at info@tokenhell.com. Please remember, cryptocurrencies are highly volatile assets. Always conduct thorough research before making any investment decisions. Some content on this website, including posts under Crypto Cable, Sponsored Articles, and Press Releases, is provided by guest contributors or paid sponsors. The views expressed in these posts do not necessarily represent the opinions of Tokenhell. We are not responsible for the accuracy, quality, or reliability of any third-party content, advertisements, products, or banners featured on this site. For more details, please review our full terms and conditions / disclaimer.