{"id":22571,"date":"2023-03-14T08:36:19","date_gmt":"2023-03-14T08:36:19","guid":{"rendered":"https:\/\/zebpay.com\/in\/?p=22571"},"modified":"2023-03-14T10:01:56","modified_gmt":"2023-03-14T10:01:56","slug":"usdc-rebounds-after-silicon-valley-bank-crisis","status":"publish","type":"post","link":"https:\/\/zebpay.com\/in\/blog\/usdc-rebounds-after-silicon-valley-bank-crisis","title":{"rendered":"USDC Stablecoin Rebounds Towards The $1 Peg After Being Exposed To Silicon Valley Bank (SVB) Collapse"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/zebpay.com\/in\/blog\/usdc-rebounds-after-silicon-valley-bank-crisis\/#What_Does_This_Mean_for_USDC_Stablecoin_and_the_Crypto_Industry\" title=\"What Does This Mean for USDC Stablecoin and the Crypto Industry?\">What Does This Mean for USDC Stablecoin and the Crypto Industry?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/zebpay.com\/in\/blog\/usdc-rebounds-after-silicon-valley-bank-crisis\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n\n<p>Circle Internet Financial\u2019s USDC stablecoin, the second-largest stablecoin with a market cap of $42 billion, recently experienced a de-pegging from the U.S. dollar. This occurred due to the contagion from the collapse of Silicon Valley Bank, a bank based out of the United States which specializes in VC funding of technology-related startups.&nbsp;<\/p>\n\n\n\n<p>USDC\/USDT trading pair dropped as low as $0.94 on Kraken, the lowest price it has hit since April 2021. However, as of 02:54 UTC on Saturday, it had recovered to around $0.984.&nbsp;<\/p>\n\n\n\n<p>The drop in USDC&#8217;s value from $1 on Friday was attributed to the failure of Silicon Valley Bank, where close to $3.3 billion worth of USDC&#8217;s cash reserves are reportedly parked. Stablecoins, such as USDC, play a crucial role in the crypto industry\u2019s foundation.&nbsp;<\/p>\n\n\n\n<p>Circle, tweeted late Friday stating that Circle and USDC continue to operate normally.<\/p>\n\n\n\n<figure class=\"wp-block-embed aligncenter is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Silicon Valley Bank is one of six banking partners Circle uses for managing the ~25%  portion of USDC reserves held in cash.  While we await clarity on how the FDIC receivership of SVB will impact its depositors, Circle &amp; USDC continue to operate normally.<a href=\"https:\/\/t.co\/NU82jnajjY\" target=\"_blank\">https:\/\/t.co\/NU82jnajjY<\/a><\/p>&mdash; Circle (@circle) <a href=\"https:\/\/twitter.com\/circle\/status\/1634341007306248199?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">March 10, 2023<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Does_This_Mean_for_USDC_Stablecoin_and_the_Crypto_Industry\"><\/span>What Does This Mean for USDC Stablecoin and the Crypto Industry?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The de-pegging of USDC stablecoin from the U.S. dollar has initially caused concerns about the stability of the crypto market. As of now, USDC has rebounded back to $0.9995 at the time of writing.&nbsp;<\/p>\n\n\n\n<p>Circle has reiterated that its assets of close to $42 billion are fully backed in cash and US treasuries. The company has expressed confidence in US regulatory efforts to manage the contagion to ensure that it does not spread further. Added to this, Circle has tweeted that the entire amount of $3.3 billion in reserves are secure and will be available for banking from 14th March.<\/p>\n\n\n\n<p>Read more: <a href=\"https:\/\/zebpay.com\/in\/blog\/difference-between-usdt-and-usdc\" target=\"_blank\" rel=\"noreferrer noopener\">USDT vs USDC<\/a><\/p>\n\n\n\n<figure class=\"wp-block-embed aligncenter is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Update thread on USDC<br><br>We were heartened to see the US government and financial regulators take crucial steps to mitigate risks extending from the fractional banking system.<br><br>100% of deposits from SVB are secure and will be available at banking open tomorrow.<\/p>&mdash; Jeremy Allaire (@jerallaire) <a href=\"https:\/\/twitter.com\/jerallaire\/status\/1635059024050937856?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">March 12, 2023<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Stablecoins play a crucial role in the industry, serving as a reliable means of exchange and a store of value. They provide an alternative to traditional fiat currencies, which can be prone to inflation and other economic factors.<\/p>\n\n\n\n<p>The recent events surrounding USDC have highlighted the importance of transparency and accountability in the traditional banking industry. SVB\u2019s collapse furthered the startup funding winter. Several depositors, most of which include several technology and health care related startups now have their funds withheld. It is yet to be seen how the US administration copes with the situation and mitigates further contagion.&nbsp;<\/p>\n\n\n\n<p>Read more: <a href=\"https:\/\/zebpay.com\/in\/blog\/fiat-vs-crypto\" target=\"_blank\" rel=\"noreferrer noopener\">Fiat Vs Crypto<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The events surrounding the collapse of Silicon Valley Bank have raised concerns about the impact of interest rates and the Federal bank\u2019s initiative to curb inflation. Close to $175 billion in deposits are right now under the control of Federal Deposit Insurance Corp.&nbsp;<\/p>\n\n\n\n<p>SVB had bought a huge amount of bonds a year ago in the hope to gain returns. The increase in interest rates affected the returns on the bonds. Added to this, the rise in withdrawals from the bank led to the bank selling bonds at a $2 billion loss to meet depositor needs. While the bank is small compared to several other large US banks, it shows that even under tight regulations, traditional banks could be exposed to a black swan event.&nbsp;<\/p>\n\n\n\n<p>Keep yourself up to date with the latest crypto news on <a href=\"https:\/\/zebpay.com\/in\/blog\" target=\"_blank\" rel=\"noreferrer noopener\">ZebPay blogs<\/a>. Trade confidently with <a href=\"https:\/\/zebpay.com\/in\" target=\"_blank\" rel=\"noreferrer noopener\">ZebPay India<\/a>.<\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link has-white-color has-text-color wp-element-button\" href=\"https:\/\/connect.zebpay.com\/account\/UserRegistration?returnUrl=%2FAccount%2FCampaignRegister&amp;_ga=2.147619255.1098371706.1678613497-1461365362.1677751526\" target=\"_blank\" rel=\"noreferrer noopener\">trade now<\/a><\/div>\n<\/div>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Circle Internet Financial\u2019s USDC stablecoin, the second-largest stablecoin with a market cap of $42 billion, recently experienced a de-pegging from the U.S. dollar. This occurred due to the contagion from the collapse of Silicon Valley Bank, a bank based out of the United States which specializes in VC funding of technology-related startups.&nbsp; USDC\/USDT trading pair [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":22574,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_ayudawp_aiss_exclude":false,"footnotes":""},"categories":[303],"tags":[16],"acf":[],"_links":{"self":[{"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/posts\/22571"}],"collection":[{"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/comments?post=22571"}],"version-history":[{"count":0,"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/posts\/22571\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/media\/22574"}],"wp:attachment":[{"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/media?parent=22571"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/categories?post=22571"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zebpay.com\/in\/wp-json\/wp\/v2\/tags?post=22571"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}