- 25% of Circle’s USDC cash reserves were managed by Silicon Valley Bank.
- The market cap of USDC crashed down over 14% in the last 24h.
The second largest stablecoin USD Coin (USDC) depegged from its $1 parity owing to the shutdown of the US banking giant Silicon Valley Bank on Friday. The failure of this largest bank is registered as the worst banking crash since the 2008 financial crisis.
The custom of crypto firms depositing their asset reserves in regulated banking systems is entitled to hidden threats. This is evidently proven via the recent bank-related crypto crashes. Several crypto firms were exposed to the preceding Silvergate collapse and tagged with corresponding losses.
Markedly, Silicon Valley Bank’s failure has trapped Circle and its stablecoin USDC in a terrible torpedo. A lawyer cum crypto-enthusiast MetaLawMan scrutinized US regulators for being the collapse’s initiator in the shadow. He also pointed out Signature Bank as the next target.