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© Reuters. Stablecoin exposed to Silicon Valley Bank loses dollar peg
New York, March 11 (.).- The USDC stablecoin lost its parity with the dollar this Saturday after the issuing entity, the American company Circle, announced that it has about 8% of its reserves housed in Silicon Valley Bank (SVB).
USDC (also known as ), one of the largest stablecoins backed by US dollars, traded as low as 87 cents today, missing the $1 peg for which it is designed, The Wall Street Journal reported.
The movement occurred hours after the Circle company indicated via Twitter (NYSE:) that it has 25% of its cash reserves distributed among six banks and one of them is SVB, which collapsed this Friday and had to be intervened. by US regulators.
Circle said it had started drawing its reserves from SVB on Thursday, but as of yesterday it had not recovered about $3.3 billion of the $40,000 it was storing, about 8% of the total.
Those issues prompted two major platforms to take action: Coinbase (NASDAQ:) announcing it was pausing USDC-to-US dollar conversions over the weekend due to high request volume, and Binance temporarily suspending automatic USDC-to-USD conversions. Binance USD, your token.
Another partially USDC-backed stablecoin, Dai, lost peg to the dollar and fell to 90 cents on Saturday, according to the Journal.
The collapse of SVB, the biggest bank failure in the US since the 2008 crisis and one of the largest in history, sent investors seeking safe havens and for a second day left clear reversals in the stock market.
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