Beautiful Virgin Islands

Friday, Apr 18, 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
U.S. State Department Raises El Salvador’s Safety Ranking, Making It Safer Than France and Other European Nations
UK Government Assumes Control of British Steel's Scunthorpe Plant Amid Shutdown Threat
UK MP Wera Hobhouse Denied Entry to Hong Kong During Family Visit
Bangladesh Issues Arrest Warrant for UK MP Tulip Siddiq
China Urges United States to Cancel Tariffs Amid Escalating Trade Tensions
The Empire’s USD Pyramid Scheme Is Working Brilliantly—So Why ‘Fix’ It?
China Raises Tariffs on U.S. Goods to 125% Amid Escalating Trade Dispute
Elon Musk Reports $150 Billion in Projected Government Savings Amid Fraud Investigations
U.S. and Panama Finalize Defense Agreements Amid Canal Access and Chinese Influence Concerns
China Stands Firm Amidst Trade Disputes with the US: A Factual Analysis
U.S. Tariff Escalation Sparks Global Trade Tensions
Helicopter crashes in NYC with four people on board.
Australia Dismisses China's Suggestion to Collaborate Against US Tariffs
EU Postpones Response to US Tariffs
The Trump Administration is contemplating removing Chinese companies from U.S. stock exchanges.
Violent Incidents and Public Safety Concerns Escalate in London and County Durham
UK MP Arrested on Suspicion of Rape and Child Sex Offences
UK Gears Up to Respond to US Tariffs with Industrial Strategies and Trade Initiatives
‘Rocky’ star Dolph Lundgren and his wife Emma Krokdal bask in the Miami sunshine following the actor’s lengthy health struggles.
Spain Encounters Countrywide Protests as Housing Crisis Intensifies
Alisha Lehmann's Modeling Campaign and Public Controversy Stir Debate Ahead of UEFA Women's Euro
U.S. Firms with Major International Revenue Exposure in Light of New Tariffs
President Trump Calls on the Federal Reserve to Reduce Interest Rates in Light of New Tariffs
President Trump Prolongs TikTok Sale Deadline by 75 Days
Global Markets Dive Amid Rising U.S.-China Trade Conflicts
British comedian Russell Brand faces charges of rape and several sexual assaults.
Kanye West Reveals in a New Song That His Wife Bianca Censori Has Departed from Him
Actor Jean-Claude Van Damme Accused of Having Sex with Human Trafficking Victims
Tom Cruise Pays Tribute to Val Kilmer at CinemaCon
Europe Pursues Digital Autonomy Amidst Transatlantic Strains
OpenAI Lands Unprecedented $40 Billion Funding.
Charity Chairwoman Accuses Prince Harry of Bullying and Harassment
DOGE revealed that USAID provided $84 million to the Clinton Foundation. Of this amount, $3 million was spent on Chelsea Clinton's wedding, and $10 million was used to acquire a lavish mansion.
The State Department has announced the formal closure of USAID.
Apple's Innovation Deficit: Falling Behind in AI and Foldable Technology as Chinese Developments Progress
President Trump Proposes Military Intervention to Obtain Greenland
Passenger Taken into Custody After Engaging in Masturbation on SWISS Air Flight
Barcelona player Dani Alves found not guilty of rape accusations.
PUTIN'S LIMOUSINE DETONATES—SECURITY CHAOS ENSUES
French Foreign Ministry Denounces U.S. Interference in Corporate Diversity Initiatives
Copyright Issues Emerge as AI-Generated Studio Ghibli Images Gain Popularity
This is what we refer to as CREATIVITY.
Removing the Political Opponent Means Dismissing the Remnants of Turkey's Economy.
Malaysia Strengthens Semiconductor Regulations in Response to U.S. Pressure to Restrict AI NVIDIA Chip Exports to China.
OpenAI Launches New Image Generation Tool for ChatGPT
Ex-FIFA President and French Football Icon Acquitted of Corruption Allegations
National Security Advisor Mike Waltz Under Investigation After Journalist Added to Secret Military Chat
Ex-Business Partner of Hunter Biden Discusses Possible Pardon from President Trump
U.S. Attorney General Announces Task Force to Prosecute Government Fraud
American Brands Face Consumer Boycott in Europe Amid Escalating Trade and Political Tensions
×