The Federal Deposit Insurance Corporation (FDIC) receivership of Silicon Valley Bank (SVB) has caused concerns for many depositors. However, investors in Circle and Dollar Coin (USDC) do not need to be concerned about the issue, as the business indicated in a recent Twitter post that there would be no influence on the operations of the cryptocurrency.
SVB is one of Circle’s six banking partners responsible for managing approximately 25% of USDC reserves held in cash. While it remains unclear how the FDIC receivership of SVB will impact its depositors, Circle and USDC continue to operate normally.
Earlier this month, Circle revealed that it was unable to withdraw $3.3 billion of its $40 billion from SVB. The announcement triggered a sell-off, causing the price of USDC to fall below its $1 mark.
Circle had initiated a wire transfer on March 9 to remove its funds from SVB as the bank was about to shut operations. However, the wire transfers were not fully processed, and $3.3 billion of USDC reserves remained with SVB.
Notwithstanding the obstacle, Circle and USDC have not suspended their regular business operations. It has been said by Dante Disparte, the chief strategy officer and head of worldwide policy for Circle, that SVB is essential to the economy of the United States.
Disparte cautioned that the collapse of the bank, in the absence of a rescue plan from the federal government, might have wider-reaching ramifications for business, banking, and entrepreneurs.
At the time of writing, USDC has lost 10% of its value, trading at $0.90. While this is a significant drop, investors might take comfort in the fact that Circle and USDC remain unaffected by SVB’s FDIC woes
