Silicon Valley Bank fallout: A breather as USDC jumps back to $1 peg

business-standard.com:

Crypto’s second-largest stablecoin rebounded toward its intended $1 dollar peg as issuer Circle Internet Financial. pledged to cover any shortfall in $3.3 billion of reverses held at collapsed Silicon Valley Bank. USD Coin (USDC), a key plank in crypto markets, rose as high as $1 and was trading at 98.2 cents as of 10:50 a.m. Sunday in Tokyo. The coin had earlier fetched less than 85 cents in a depeg that sent a shudder through digital assets.

Circle reiterated its stablecoin, also known as USDC, is fully backed by $42.1 billion in cash and US Treasuries. The company said outbound transfers of the $3.3 billion at Silicon Valley Bank initiated as of Thursday had yet to settle but expressed confidence in US regulatory efforts to manage the overall situation.

Circle said it’s possible “SVB may not return 100 per cent and that any return might take some time,” in which case the firm “as required by law under stored-value money transmission regulation, will stand behind USDC and cover any shortfall using corporate resources, involving external capital if necessary.” The volatility in USDC, which is meant to be one of the safest assets in crypto with a constant $1 value, had spread to other stablecoins like Dai and Pax Dollar but they also pushed closer to their pegs.