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Silicon Valley Bank’s collapse crashes stablecoin, USDC to all-time low
The impact of Silicon Valley Bank’s liquidation has spread into the cryptocurrency industry as USD Coin (USDC), the second most valuable Stablecoin, hit an all-time low on Saturday.
USDC which is promoted by a United States firm, Circle, fell to $0.86 earlier on Saturday, below its usual $1 market price.
The dip also surpassed the previous all-time low of $0.97 posted in 2018.
The USDC was created to trade at the same value as the United States $1, therefore its crash rocked the cryptocurrency market.
It later rose to $0.96 on Saturday night.
Ripples Nigeria gathered that USDC’s crash followed the disclosure by Circle on Friday that it was financially exposed to Silicon Valley Bank’s liquidation.
Circle said Silicon Valley Bank houses $3.3 billion of its $40 billion USDC reserves, triggering a sell-off among its traders.
READ ALSO: Silicon Valley begins talks with prospective buyers after shutdown
“Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB,” Circle tweeted late on Friday.
This has increased the fear of withdrawal among crypto traders following Silicon Valley Bank depositors’ inability to access their accounts.
Also, Circle is financially exposed to Silvergate Bank, a US financial firm that also liquidated this week.
Circle had said a small percentage of USDC reserve deposited in Silvergate Bank had been transferred to other banking partners.
Ripples Nigeria had earlier reported that Silicon Valley Bank was currently locked in talks with potential buyers after its shutdown by industry regulators.
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