The stablecoin USD Coin (USDC) has deviated from its $1 peg due to Circle’s exposure to the recently-collapsed Silicon Valley Bank. Circle, which issues the world’s second-largest stablecoin USDC, revealed in a tweet that $3.3 billion of its $40 billion USDC reserves were held at the failed bank. Despite making wire transfer requests to remove the balances, they were not processed by Friday’s end. Concerns grew around the stablecoin’s reserve and redemptions followed, leading to USDC burning $2.34 billion on Friday. The stablecoin’s price hit an all-time low of roughly $0.8774 on Saturday but has since trimmed losses to trade around $0.919. Deloitte’s audit revealed that Circle holds 77% of its reserves in Treasury Bills, providing a floor of $0.77 on USDC, offering some assurance to holders.
