At the start of the week, the trading session took a toll on USDC and Other Cryptocurrencies Following United States Authorities’ Measures to Mitigate Silicon Valley Bank’s Collapse.
Circle’s USDC Reserves at Risk: SVB’s Closure by California Department of Financial Protection and Innovation Sends Stablecoin Plummeting to 0.87 dollars. “Circle’s USDC Reserves Further Under Scrutiny as Silvergate’s Collapse Raises Questions on Undisclosed Amount”
| Name | Price | 24H (%) |
|---|---|---|
 Bitcoin(BTC) | $64,492.00 | 1.35% |
 Ethereum(ETH) | $3,166.87 | 1.37% |
 Dogecoin(DOGE) | $0.161433 | -1.44% |
 Cardano(ADA) | $0.463705 | -0.77% |
 Polygon(MATIC) | $0.74 | 0.64% |
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Circle Chair Commends U.S. Government for Intervention in SVB Crisis
Following the announcement of the U.S. government and Federal Reserve’s funding initiative of twenty-five billion dollars to support banks in managing their liquidity concerns, Jeremy Allaire, CEO of Circle, took to Twitter on Sunday to express his approval.
In a statement, Jeremy Allaire, the Circle Chair, affirmed the complete security and safety of all USDC reserves, stating that the remaining SVB cash would be transferred to BNY Mellon. He also assured me that the transfer process would be finalized.
Witnessing the U.S. government and financial regulators taking critical measures to minimize the risks emanating from the fractional banking system was reassuring. In addition, the CEO mentioned that a hundred percent of the deposits obtained from SVB are entirely safe and will be accessible when the banks open tomorrow.
Decoupling USDC from the U.S. dollar could significantly affect the cryptocurrency industry and the wider economy. Under such circumstances, USDC’s worth would no longer be explicitly linked to the U.S. dollar and could sway independently in response to market dynamics.
If USDC were to decouple from the U.S. dollar, it would trigger substantial instability in the cryptocurrency market. As a result, investors and traders would likely have to adjust their positions appropriately to cope with the alteration in worth.
Additionally, it could have more extensive implications for applying stablecoins in trade. For example, vendors may become wary of acknowledging a currency no longer firmly tied to a stable and broadly recognized currency such as the U.S. dollar.
The delinking of USDC could have regulatory consequences. Regulators may have to examine stablecoins more meticulously following such a significant incident.
Moreover, if the decoupling occurs, it might encourage intense competition among stablecoins as users hunt for stablecoins that are more dependable and less vulnerable to price fluctuations.
USDC Experiences Financial Pressure
Last week, the cryptocurrency markets witnessed a downturn due to the closure of Silvergate, which directly influenced the industry and the collapse of Silicon Valley Bank.
U.S. regulators assured on Sunday that all depositors would remain secure in the aftermath of the collapse of Silicon Valley Bank, located in Santa Clara, California. Additionally, they revealed emergency strategies to prevent the crisis from spreading.
Federal Deposit Insurance Corp. Chairman Martin Gruenberg, Federal Reserve Chair Jerome Powell and U.S. Treasury Secretary Janet Yellen made the declaration in a joint statement. Despite the statement, USDC still experienced the impact of the most recent occurrences relating to the cryptocurrency market.
As per the information given by CoinGecko, the current value of one USDC is ninety-eight cents. Among all the markets, Kraken’s USD/USDC exchange value of 99.22 cents is the one that resembles its previous parity level the most.
The USDT-USDC futures pair on Binance are valued at 98.72 cents, slightly above the current spot price of ninety-eight cents. This situation indicates that certain investors remain optimistic about restoring the peg.
