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Circle CEO Jeremy Allaire to save crypto following the collapse of some major mainstream banks, including Silicon Valley Bank.
Circle CEO Jeremy Allaire recently disclosed that the USDC stablecoin issuer wants to save crypto from fallen banks. In an interview, Allaire touched on the adjustments the peer-to-peer payments technology company made following Silicon Valley Bank’s recent collapse. According to the Circle CEO, around $3.3 billion worth of funds was in transit from Silicon Valley to BNY Mellon.
Allaire also questioned the narrative suggesting the protection of the mainstream banking system from digital currencies. Instead, the internet entrepreneur opined that crypto needs saving from traditional banks rather than the other way around. Referencing the SVB and Signature Bank situation, and how Circle is scrambling to ‘save’ crypto, the CEO noted:
“Everybody’s talking about how we need to save the banks from crypto, and right now, we’re trying to save crypto from the banks.”
On Circle moving $3.3 billion from Silicon Valley to BNY Mellon, Allaire also explained:
“We’ve got $3.3 billion in transit, and we can see in the fed wire system that the receiving bank is acknowledging ‘yes, this is incoming. It hasn’t settled on the fed wire ledger.”
Scrutiny into how mainstream banks manage deposits for crypto companies intensified following the collapse of several prominent financial institutions, including Santa Clara-based Silicon Valley Bank, San Diego-based crypto-friendly Silvergate Bank, and New York-based Signature Bank (NASDAQ: SBNY).
Circle CEO Comments to Save Crypto Comes After USDC Dollar Depegging
Circle’s USDC stablecoin lost its dollar parity on news that the Boston-based decentralized tech company held money at Silicon Valley. However, Circle pledged to cover any shortfall as part of the $3.3 billion in customers’ funds transited from the ill-fated bank.
Circle also explained that they have a legal obligation to support USDC and could deploy corporate resources and external capital if needed. In a Twitter thread from March 12th, Allaire said that “USDC liquidity operations will resume as normal when banks open on Monday morning in the United States. As a practical matter, our teams are well prepared to handle significant volumes built on the strong liquidity and reserve assets discussed below. As a regulated payment token, USDC will remain redeemable 1 for 1 with the US Dollar.”
Furthermore, Circle reiterated that the USD Coin has a 100% collateralization with cash and US Treasuries. As of March 13th, the popular stablecoin had a 77% collateralization ($32.4 billion) with US Treasury bills and 23% ($9.7 billion) with cash. The Treasury bills have a three-month or less maturation period, while the cash is held at several institutions.
Community Update Regarding Stablecoin Operations
In other developing news, Circle updated its community on its stablecoin operations. According to the company, it had started processing its redemption via a new banking partner. The company, which issues the second-largest stablecoin, also said it had resumed its regular operations.
While USDC currently has a $37 billion valuation according to CoinMarketCap data, Circle has received more than $135 million in venture capital funding across 4 investment rounds.