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USDC Survives Silicon Valley Bank Collapse and Clears Backlog

1 min
16 March 2023, 15:01 GMT+0000
Updated by Geraint Price
16 March 2023, 15:02 GMT+0000
In Brief
  • USDC cleared all the redemption and minting backlogs.
  • Circle has withdrawn from the Silicon Valley Bank and changed its banking partner.
  • But the stablecoin lost its circulating supply dominance to rival USDT.
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Circle, the issuer of USDC, has announced that they have cleared all the backlog of minting and redemption following the depegging of the stablecoin over the weekend.

Circle said they had redeemed $3.8 billion USDC and minted $0.8 billion USDC since Monday. They have also changed their banking partner after the Silicon Valley Bank (SVB) collapse. However, a community member complained on Twitter that they still have their withdrawal request pending.

USDC Regains Peg but Loses out to USDT

After last weekend’s events, Circle had backlogs piled up for USDC withdrawals. But, they have changed the banking partners to avoid any hindrance in its operation.

The stablecoin issuer writes, “On Tuesday, March 14, we went live with a new transaction banking partner for domestic U.S. wires in and out. Today, we went live with that same partner for international wires to and from 19 countries. We also went live today with an existing transaction banking partner for international wires.”

Despite recovering the peg, due to last week’s turmoil, USDC is losing its dominance to its rival stablecoin USDT. According to a Bloomberg article, USDC’s circulating supply dropped by 5.9 billion tokens, whereas USDT increased its supply by 2.5 billion tokens.

Circle USDC stablecoin market share, screenshot from Bloomberg
Source: Bloomberg

Over last weekend, USDC lost its peg by almost 12%, trading at 0.88. It lost over $6 billion in market capitalization after Circle revealed its exposure to SVB. But shortly, it was redeemable to USD on Monday after the Federal Reserves announced it would make customers’ deposits at SVB whole.

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