Circle Internet Financial promised to “cover any shortfall” in its reserves for the stablecoin USDC, which had been backed by $3.3 billion held in Silicon Valley Bank. This pledge was made in response to the bank’s seizure by the FDIC.
In a blog post, Circle said it was ready to employ its corporate resources, or even external capital if need be, to ensure that USDC’s reserves remain intact. This news followed a drop in the stablecoin’s value, which had been linked to the U.S. Dollar.
The company stated that it was in the process of moving its assets out of Silicon Valley Bank prior to the FDIC’s intervention, which could settle on Monday when normal banking operations resume. However, it is possible that the bank may not return the full amount, with the FDIC issuing IOUs to its deposit holders.
The stablecoin’s price had dropped to $0.88 in the last 24 hours, but rebounded to $0.97 after Circle’s announcement. Coingecko