Beautiful Virgin Islands

Saturday, Sep 06, 2025

Silicon Valley Bank Failure Rattles "Stable" Cryptocurrency USD Coin

Silicon Valley Bank Failure Rattles "Stable" Cryptocurrency USD Coin

Circle said late Friday it had been unable to withdraw its reserves from Silicon Valley Bank, whose sudden collapse rattled financial markets.
The supposedly "stable" cryptocurrency USDC fell sharply after the firm that created it, Circle, announced it holds $3.3 billion in failed Silicon Valley Bank (SVB) and has dropped its peg to the dollar.

Circle said late Friday it had been unable to withdraw its reserves from SVB, whose sudden collapse rattled financial markets.

The Federal Deposit Insurance Corporation on Friday took over SVB, a major lender to the tech world, in the second-largest bank failure in US history.

SVB is expected to reopen on Monday under a new name, with billions in customer deposits now under FDIC control.

The FDIC guarantees deposits -- but only up to $250,000 per client and per bank.

The agency said Friday it would provide certificates to customers with uninsured funds -- those above the $250,000 limit -- so that they would be the first to receive funds eventually recovered while the bank is in receivership.

But the process of liquidating the bank's assets can be long, with no certainty of just how much will be recovered.

The USD Coin, or USDC, was launched in 2018 as a "stablecoin," meaning it was indexed to a currency backed by a central bank, in this case the US dollar.

It is listed as the second largest "stable" currency worldwide, based on its volume in circulation (around $40 billion), behind Tether.

Stablecoins are supposed to be backed by equivalent reserves in immediately available assets, either cash or readily convertible financial securities.

Overnight Friday to Saturday, the USDC fell to its lowest level ever, dropping to 87 cents before recovering to around 94 cents.

Other stablecoins have also suffered.

The Dai, the fourth-largest stablecoin by volume in circulation, fell to 95 cents, while the Frax (sixth largest) fell to 94 cents, its lowest ever.

The Coinbase cryptocurrency exchange platform said it was suspending USDC-dollar conversions until Monday, given its exceptionally high activity.

More than $25 billion in USDC had been exchanged on the Coinbase platform in 24 hours, an enormous volume compared to overall holdings.

Meantime, Binance, the largest cryptocurrency transaction site, said it was suspending conversions of USDC into BUSD -- Binance USD, the platform's own "stable" currency.

"Like other customers and depositors who relied on SVB for banking services, Circle joins calls for continuity of this important bank in the US economy and will follow guidance provided by state and Federal regulators," Circle said in a statement.

Withdrawal orders from SVB reached a breathtaking $42 billion in a single day on Thursday, according to the California Department of Financial Protection and Innovation.

When the bank was unable to honor all those requests, the FDIC stepped in to take control.
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
US Justice Department Launches Criminal Mortgage-Fraud Probe into Federal Reserve Governor Lisa Cook
Escalating Drug Trafficking and Violence in Latin America: A Growing Crisis
US and Taiwanese Defence Officials Held Secret Talks in Alaska
Report: Secret SEAL Team 6 Mission in North Korea Ordered by Trump in 2019 Ended in Failure
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Florida Murder Case: The Adelson Family, the Killing of Dan Markel, and the Trial of Donna Adelson
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Big Tech Executives Laud Trump at White House Dinner, Unveil Massive U.S. Investments
Tether Expands into Gold Sector with Profit-Driven Diversification
‘Looks Like a Wig’: Online Users Express Concern Over Kate Middleton
Brand-New $1 Million Yacht Sinks Just Fifteen Minutes After Maiden Launch in Turkey
Here’s What the FBI Seized in John Bolton Raid — and the Legal Risks He Faces
Florida’s Vaccine Revolution: DeSantis Declares War on Mandates
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
"The Situation Has Never Been This Bad": The Fall of PepsiCo
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
The Fashion Designer Who Became an Italian Symbol: Giorgio Armani Has Died at 91
Putin Celebrates ‘Unprecedentedly High’ Ties with China as Gazprom Seals Power of Siberia-2 Deal
China Unveils New Weapons in Grand Military Parade as Xi Hosts Putin and Kim
Queen Camilla’s Teenage Courage: Fended Off Attempted Assault on London Train, New Biography Reveals
Scottish Brothers Set Record in Historic Pacific Row
Rapper Cardi B Cleared of Liability in Los Angeles Civil Assault Trial
Google Avoids Break-Up in U.S. Antitrust Case as Stocks Rise
Couple celebrates 80th wedding anniversary at assisted living facility in Lancaster
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
The White House on LinkedIn Has Changed Their Profile Picture to Donald Trump
"Insulted the Prophet Muhammad": Woman Burned Alive by Angry Mob in Niger State, Nigeria
Trump Responds to Death Rumors – Announces 'Missile City'
Court of Appeal Allows Asylum Seekers to Remain at Essex Hotel Amid Local Tax Boycott Threats
Germany in Turmoil: Ukrainian Teenage Girl Pushed to Death by Illegal Iraqi Migrant
United Krack down on human rights: Graham Linehan Arrested at Heathrow Over Three X Posts, Hospitalised, Released on Bail with Posting Ban
Asian and Middle Eastern Investors Avoid US Markets
Ray Dalio Warns of US Shift to Autocracy
Eurozone Inflation Rises to 2.1% in August
Russia and China Sign New Gas Pipeline Deal
China's Robotics Industry Fuels Export Surge
Suntory Chairman Resigns After Police Probe
Gold Price Hits New All-Time Record
Von der Leyen's Plane Hit by Suspected Russian GPS Interference in an Incident Believed to Be Caused by Russia or by Pro-Peace or by Anti-Corruption European Activists
UK Fintechs Explore Buying US Banks
Greece Suspends 5% of Schools as Birth Rate Drops
Apollo to Launch $5 Billion Sports Investment Vehicle
Bolsonaro Trial Nears Close Amid US-Brazil Tension
European Banks Push for Lower Cross-Border Barriers
Poland's Offshore Wind Sector Attracts Investors
Nvidia Reveals: Two Mystery Customers Account for About 40% of Revenue
Woody Allen: "I Would Be Happy to Direct Trump Again in a Film"
×