- Circle said the decision was due to the ongoing uncertainty at the bank.
- USDC ranks fifth among the major cryptocurrencies with the largest market cap.
Circle, the USDC stablecoin issuer regulated in the United States, has moved a small percentage of its USDC reserve deposits held at the troubled Silvergate Bank to its other banking partners.
Circle announced this development in a press statement dated March 4, 2023, noting that the decision was due to the ongoing uncertainty at the bank. The USDC issuer noted that its top priority was the protection of reserve funds backing USDC, even if it meant winding down its relationship with Silvergate.
Additionally, Circle commenced the withdrawal processes last year as signs of trouble and broader crypto asset risk exposure became increasingly apparent on Silvergate Bank’s end.
Furthermore, the stablecoin issuer maintained that all USDC reserves are held in several well-capitalized US banks and the Circle Reserve Fund, which currently comprises approximately 80% of USDC reserves. The sum of these reserves is now reviewed and attested to each month by Deloitte, a leading global audit firm.
According to the market tracking platform, CoinMarketCap, USDC ranks fifth among the major cryptocurrencies with the largest market cap. The attested treasury statement on Circle’s website shows that the company’s USDC reserve is in a one-to-one ratio.
On Friday, Digital Asset Capital Management (DACM), a crypto hedge fund, which previously had a business relationship with Silvergate Banks, announced that it would be turning to Switzerland banks for assistance.
Richard Galvin, the co-founder of DACM, said:
Some banks handle crypto transactions, but they are not crypto-focused, unlike Silvergate. It might take some time to find a banking partner. We’re speaking to some Swiss banks.
Swiss financial institutions dealing with digital assets include Sygnum Bank AG and SEBA Bank AG.