Contagion from the shuttering of Silicon Valley Bank (NASDAQ: SIVB) continues to hit the markets, with the latest impact being felt by Circle, whom revealed it had $3.3 billion parked at the now-closed bank.
The impact has lead Coinbase Global (NASDAQ: COIN) to halt conversions of the USDC stablecoin to US Dollars for the duration of this weekend, effective late Friday night. The development was released by the exchange via Twitter.
Coinbase indicated that the conversion would be “temporary,” with the exchange indicating that it would be pausing the conversions for the weekend “while banks are closed.” This, despite the draw to crypto being that it operates 24/7, 365 days a year.
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The pause on conversion follows Circle announcing just a half hour prior that a total of $3.3 billion of its $40 billion in reserves were still tied up at Silicon Valley Bank. Under FDIC guidelines, $250,000 of that figure is insured, while the remainder is subject to assets of the now defunct bank being sold off to recover any additional funds. In short, it’s unclear how much, if any, additional funds the firm will receive.
USDC meanwhile has lost its peg to the dollar as a result, falling as much as 5% as consumers look to exit the stablecoin as confidence wanes.
Information for this briefing was found via Edgar, FDIC, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
