Major cryptocurrencies stabilise after US intervenes on SVB
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MAJOR cryptocurrencies stabilised on Monday (Mar 13) after US authorities announced plans to limit the fallout from the collapse of Silicon Valley Bank (SVB) and the issuer of the USD Coin stablecoin said it remained redeemable with the dollar.
US authorities launched emergency measures on Sunday to shore up confidence in the banking system after the failure of SVB threatened to trigger a broader financial crisis, and said SVB customers would have access to their deposits from Monday.
USD Coin, also known as USDC, recovered to US$0.9917, up from a record low of US$0.87 hit on Saturday, far below its intended peg of 1:1 against the dollar. The fall was sparked by concerns on the exposure of Circle – the US firm that issues USDC – to SVB.
Top cryptocurrency bitcoin, meanwhile, slipped 0.3 per cent to US$22,125 on Monday morning, but was still up around 8 per cent from Sunday’s lows.
Jeremy Allaire, CEO of USDC issuer Circle, said in a tweet on Sunday that the company’s US$3.3 billion USDC reserves deposit – about 8 per cent of its total – held at the collapsed SVB Bank would be fully available when US banks open on Monday.
“Circle’s USDC operations will open for business, including with new automated settlement via our new partnership with Cross River Bank,” Allaire said.
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New Jersey-based Cross River did not immediately respond to a request for comment.
Stablecoins such as USDC, the second-largest by market size, are a crucial cog in the world of crypto trading. They are designed to keep a steady value, and are typically backed by reserves of traditional assets such as dollars, bonds or gold.
The relief for crypto was tempered by New York’s chief financial regulator taking possession of Signature Bank , a key banking firm for crypto companies.
With the fall of SVB and California-based Silvergate Bank, its closure means that three of the main US banks used by crypto businesses have failed this year.
Shares of Signature Bank were halted for trading, with US officials saying depositors of Signature Bank would be made whole at no loss to the taxpayer.
Its fall represents another blow to connections between the crypto and banking sectors, already strained by a growing US regulatory crackdown.
Top US exchange Coinbase Global tweeted on Sunday that after Signature’s fall it was “facilitating all client cash transactions with other banking partners,” without elaborating.
Coinbase said that as of Friday’s close, it had an approximately US$240 million balance in corporate cash at Signature, but expects to fully recover the funds. REUTERS
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