{"id":18613,"date":"2023-03-12T00:09:03","date_gmt":"2023-03-12T00:09:03","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/circle-issues-update-amid-stablecoin-volatility-firm-is-prepared-to-stand-behind-usdc-and-cover-any-shortfall-bitcoin-news\/"},"modified":"2023-03-12T00:09:03","modified_gmt":"2023-03-12T00:09:03","slug":"circle-issues-update-amid-stablecoin-volatility-firm-is-prepared-to-stand-behind-usdc-and-cover-any-shortfall-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/circle-issues-update-amid-stablecoin-volatility-firm-is-prepared-to-stand-behind-usdc-and-cover-any-shortfall-bitcoin-news\/","title":{"rendered":"Circle Issues Update Amid Stablecoin Volatility; Firm Is Prepared to ‘Stand Behind USDC and Cover Any Shortfall’ \u2013 Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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On Saturday, March 11, 2023, Circle Financial updated the public about its stablecoin, USDC, and noted that the stablecoin\u2019s liquidity operations will resume normally on Monday morning in the United States. Circle said that the company\u2019s teams would be ready on Monday to \u201chandle significant volume\u201d and that the firm will \u201cstand behind USDC and cover any shortfall using corporate resources, involving external capital if necessary.\u201d<\/strong><\/p>\n

Circle Financial Confident in USDC Stability Despite SVB Failure<\/h2>\n

Circle, the issuer of the second-largest stablecoin by market capitalization, usd coin (USDC), addressed the public<\/a> on Saturday, noting that the firm will be ready on Monday to \u201chandle significant volume.\u201d The company discussed the failure of Silicon Valley Bank (SVB) and also emphasized the USDC\u2019s \u201cstrong liquidity and reserve assets.\u201d On Monday, the stablecoin issuer noted, \u201cUSDC will remain redeemable 1-for-1 with the U.S. dollar.\u201d<\/p>\n

While usd coin (USDC) is a crypto asset that operates 24\/7 on various blockchains, Circle emphasized that \u201cissuance and redemption is constrained by the working hours of the U.S. banking system.\u201d Circle\u2019s stablecoin USDC dropped to a low<\/a> of $0.877 per unit on Saturday, March 11, 2023, at 3:02 a.m. ET. Following the announcement from Circle, USDC managed to rise 10% higher, and at 4:15 p.m., the stablecoin was swapping for $0.971 per coin. In addition to USDC, five other stablecoin assets deviated<\/a> from their $1 parity on Saturday.<\/p>\n

Circle said that while $3.3 billion in USDC cash reserves are held at SVB, the company initiated transfers of the funds to other banks, and it remains \u201cconfident in the FDIC\u2019s management of the SVB situation and stands ready to receive these funds.\u201d The stablecoin issuer further noted that it has \u201creason to believe that, under applicable FDIC policy, transfers initiated prior to a bank entering receivership would have otherwise been processed normally.\u201d Circle continued:<\/p>\n

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In other words, the FDIC should allow transactions to settle in the ordinary course through the end of a bank\u2019s standard daily processing cycle until the FDIC takes control of the failed institution.<\/p>\n<\/blockquote>\n

However, Circle does address a negative scenario where SVB may not become whole, and the company\u2019s return may take time. Circle stressed that if that were to happen, it would still stand behind the stablecoin it issues. \u201cIn such a case, Circle, 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,\u201d the company\u2019s update concludes.<\/p>\n

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\nTags in this story
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Banking system<\/a>, Blockchain<\/a>, Circle Financial<\/a>, Corporate Resources<\/a>, Crypto asset<\/a>, External Capital<\/a>, Failed Institution<\/a>, FDIC<\/a>, issuance<\/a>, Liquidity<\/a>, Market Capitalization<\/a>, Negative Scenario<\/a>, Ordinary Course<\/a>, Parity<\/a>, Public Update<\/a>, Reassurance<\/a>, redemption<\/a>, Reserve Assets<\/a>, Settlement<\/a>, shortfall<\/a>, Silicon Valley Bank<\/a>, Stablecoin<\/a>, Stand Behind<\/a>, Stored-Value Money Transmission Regulation<\/a>, SVB<\/a>, transactions<\/a>, transfers<\/a>, usd coin<\/a>, USDC<\/a>, volume<\/a><\/div>\n<\/div>\n

What do you think about Saturday\u2019s stablecoin volatility and Circle\u2019s recent update? Share your opinion in the comments section below.<\/strong><\/em><\/p>\n

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\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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