USD Coin stablecoin falls further from peg on SVB exposure risk

USD Coin, the stablecoin issued by Circle Internet Financial, fell further from its dollar peg and traded as low as 90 US cents as investors reacted to the token’s exposure to the collapsed Silicon Valley Bank.

Circle said US$3.3 billion of its about US$40 billion of USD Coin reserves remain at Silicon Valley Bank (SVB), which became one of the largest bank failures in US history on Friday (Mar 10)

Circle’s stablecoin, also known as USDC, was trading at about 92 UScents as of 12:05pm. in Singapore on Saturday. It is the second-largest stablecoin in crypto, with a circulating supply of about 41 billion, according to CoinGecko data.

Asset-backed stablecoins like USDC are intended to hold a set value against another, highly liquid asset like the US dollar. They come in a variety of forms and some, like Circle’s, are underpinned by reserves like cash and bonds. Investors often park funds in stablecoins as they move between crypto trades. BLOOMBERG