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Stablecoin USDC faces $3.3 billion exposure to Silicon Valley Bank

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Crypto exchange Coinbase said Friday it is temporarily suspending the conversion between stablecoin USDC and USD over the weekend, after the stablecoin’s creator Circle said about $3.3 billion, or more than 8% of over $40 billion USDC reserves, are held at Silicon Valley Bank, which collapsed on Friday. 

USDC
USDCUSD,
-8.67%
,
which is co-supported by Coinbase
COIN,
-8.00%

and Circle, is the world’s second-largest stablecoin. 

Coinbase said it would resume the conversions between USDC and USD on Monday. “During periods of heightened activity, conversions rely on USD transfers from the banks that clear during normal banking hours,” the company tweeted Friday. 

“Your assets remain safe & available for on-chain sends,” Coinbase added. 

Amid concerns over contagion brought by Silicon Valley Bank, investors cashed out more than $2.3 billion USDC in the 24 hours leading to Friday evening, according to data from Nansen. 

While most of the USDC reserves are invested in Treasuries, close to $9 billion of them were held in cash at banks including Bank of New York Mellon
BK,
-1.44%
,
Citizens Trust Bank, Customers Bank, New York Community Bank, a division of Flagstar Bank, N.A., Signature Bank
SBNY,
-22.87%
,
Silicon Valley Bank and Silvergate Bank
SI,
-11.27%

as of Jan.31, according to an attestation report in March.

The Federal Deposit Insurance Corporation has taken over more than $175 billion in deposits at Silicon Valley Bank. FDIC’s standard insurance covers up to $250,000 per depositor, per insured bank, for each account ownership category.

The rest of the depositors are uninsured — they will be paid an advance dividend within the next week and get receivership certificates for their balances, FDIC said. Whether and how much depositors with over $250,000 would get their money back, depends on the amount of money FDIC receives from selling Silicon Valley Bank’s assets. 

Representatives at Circle and Coinbase didn’t respond to requests seeking comment. 



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Jacob Keiter is a husband, a writer, a journalist, a musician, and a business owner. His journey to becoming a writer was one that was paved with challenges, but ultimately led him to find his true calling. Jacob's early years were marked by a strong desire for creative expression. He was always drawn to music, and in his youth, he played in several bands, chasing the elusive promise of fame and success. However, despite his best efforts, Jacob struggled to find the recognition he craved. It wasn't until he hit a low point in his life that Jacob discovered his love for writing. He turned to writing as a form of therapy during a particularly difficult time, and found that it not only helped him to cope with his struggles, but also allowed him to express himself in a way that he had never been able to before. Jacob's writing skills quickly caught the attention of others, and he soon found himself working as a journalist for The Sun out of Hummelstown. From there, he went on to contribute to a variety of publications, including the American Bee Journal and Referee Magazine. Jacob's writing style is reflective of traditional journalism, but he also infuses his work with a unique voice that sets him apart from others in his field. Despite his success as a writer, Jacob also owns another business, JJ Auto & Home, which specializes in cleaning. Jacob's commitment to excellence is evident in all of his endeavors, whether it be in his writing or in his business ventures. Today, Jacob is the author of two books and continues to inspire others through his writing. His journey to becoming a writer serves as a reminder that sometimes our darkest moments can lead us to our greatest achievements.

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