Yahoo Autos USDC stablecoin breaks dollar peg following Silicon Valley Bank collapse
Circle, the company behind the cryptocurrency, had $3.3 billion at the financial institution.
The abrupt collapse of Silicon Valley Bank has affected the value of the world’s fifth-largest cryptocurrency, increasing fears of a possible ripple effect among Web3 companies. On Saturday morning, USD Coin fell to a record low of $0.87 after Circle, the company that manages the stablecoin, disclosed that $3.3 billion of the approximately $10 billion cash reserves backing USDC was held by SVB.
As The Guardian notes, the drop is unprecedented. As a stablecoin, the value of USDC is supposed to remain stable thanks to its peg to the US dollar. According to data from CoinGecko, USDC’s previous all-time low was about $0.97 in 2018. More recently, the currency fell to $0.99 following the collapse of Three Arrows Capital. As of the writing of this article, USDC is valued at approximately $0.95 cents.
