• 17 July, 2024
News

Circle’s Race Against Time: Restoring USDC Liquidity Amid Crisis

In the wake of the unexpected failures of Silicon Valley Bank and Signature Bank, Circle, the leading player in the global crypto ecosystem, says it has been working tirelessly to restore USDC liquidity operations and protect its fiat-backed stablecoin.

On Sunday, March 12, the U.S. Treasury, Federal Reserve, and FDIC jointly intervened to protect depositors from the fallout of the banking failures, highlighting the importance of a stable U.S. banking system for the functioning of fiat-backed stablecoins such as USDC.

Circle has faced challenges in the aftermath of losing its core transaction banking partners, Signature Bank and Silvergate Bank. However, the company seems to have swiftly taken action, with its teams working non-stop to bring on new transaction banking partners and restore USDC liquidity operations.

The company resumed processing minting and redemption requests on Monday morning, March 13, and is actively working through the backlog.

As part of Circle’s commitment to providing a stable and secure stablecoin, the company is focused on expanding its network of transaction banking partners, prioritizing those with 24/7/365 capabilities. Circle has pledged to keep its community informed of its ongoing progress.

On Monday, Circle redeemed $2.9 billion USDC and minted $0.7 billion USDC, demonstrating its ability to navigate the current challenges and maintain operations. In an effort to further bolster the USDC reserve, Circle now holds the cash portion of the reserve at BNY Mellon, with limited funds maintained at transaction banking partners to support USDC minting and redemption.

The majority of the USDC reserve is invested in the Circle Reserve Fund, which is managed by BlackRock and custodied at BNY Mellon. The fund primarily consists of short-dated U.S. Treasuries, emphasizing Circle’s dedication to maintaining a strong and stable reserve for its users.

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