Spread financial intelligence
The Silicon Valley Bank‘s (SVB) sudden death on Friday triggered shockwaves in the already traumatized crypto scene. One of the victims of the SVB collapse was the USDC stablecoin, which is 100% collateralized with cash and US Treasuries. $3.3 billion of USDC’s cash reserves had been deposited with SVB at the time of the collapse. The USDC price dived but recovered quickly. USDC issuer Circle said they hope the regulators will find a solution that protects customers’ assets 100%.
In a blog post, Circle explained that the USDC is currently collateralized 77% ($32.4B) with US Treasury Bills (with a three-month or less maturation period) and 23% ($9.7B) with cash held at a variety of institutions, of which SVB is only one. US Treasury Bills are the most liquid assets in the world and are direct obligations of the U.S. government. These reserves are held in custody by BNY Mellon, and active liquidity and asset management is managed by BlackRock.
The remaining 23% ($9.7B) is in cash, of which $5.4B are deposited with BNY Mellon, one of the world’s largest and most stable financial institutions, known for the strength of their balance sheet and as a custodian. $3.3B of USDC’s cash reserves remained with SVB. $1bn of the USDC reserves is held with Customers Bank.
USDC had zero exposure to the collapsed Silvergate Bank when the bank announced its voluntary liquidation, Circle said.