USD Coin (USDC/USD), the stablecoin issued by Circle Internet Financial Ltd., has fallen below $0.90 after the company confirmed exposure to Silicon Valley Bank. This has caused concern among investors and sent shockwaves through the cryptocurrency market, as major cryptocurrencies like Bitcoin and Ethereum also struggle with selloff pressure near $20,000 and $1,400, respectively.
The depegging of USDC is a significant event that highlights the risks and vulnerabilities of stablecoins, which are designed to maintain a stable value by being backed by a reserve of assets. However, external factors like the failure of a financial institution, such as Silicon Valley Bank, can still affect them.
Circle has confirmed that it has $3.3 billion in USDC collateral on deposit with Silicon Valley Bank, and following pressure from the crypto community, the company has acknowledged that this amount has been affected by the bank’s failure. The news has led to a decline in confidence in the company and its stablecoin, resulting in the fall below $0.90.
Coinbase, one of the largest cryptocurrency exchanges, has temporarily paused conversions of USDC into USD during the weekend due to concerns over the stability of the coin.
The fall of USDC is a significant event that has raised concerns about the stability of stablecoins and their potential impact on the cryptocurrency market. It remains to be seen how Circle and the wider market will respond to this news, but investors will be closely
