USDC bounces back after SVB collapse; Redeems $3.8 billion
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In a stunning comeback, Circle, the stablecoin issuer, has redeemed $3.8 billion worth of USDC and minted about $800 million worth of USDC since Monday. Circle has also changed its banking partner after the collapse of Silicon Valley Bank (SVB) caused chaos in the stablecoin world.
They switched to a new transaction banking partner for domestic U.S. wires on Tuesday, March 14. That same partner is also handling international wires to and from 19 countries. As if that wasn’t enough, they also went live with an existing transaction banking partner for international wires. However, withdrawal requests are still pending, according to a community member on Twitter.
Update: As of close of U.S. banking operations Wednesday, March 15, we have cleared substantially all of the backlog of minting and redemption requests for USDC. Get the details: https://t.co/5WEAgPps0E
— Circle (@circle) March 16, 2023
USDC Battles It Out with USDT
Although Circle has been working hard to improve USDC’s performance, the stablecoin is still facing a tough challenge from its rival, USDT. Bloomberg reported that USDC’s circulating supply has decreased by 5.9 billion tokens, while USDT has seen an increase of 2.5 billion tokens.
Let’s not forget USDC’s rocky history. Last weekend, USDC lost its peg by almost 12%, trading for as low as $0.88. Talk about an arbitrage opportunity!
It was not a good look for USDC, and the market capitalization took a $6 billion hit after Circle revealed its exposure to SVB. However, thanks to the Federal Reserve, USDC was redeemable for USD on Monday after they announced they would make customers’ deposits at SVB whole.
It’s great to see Circle making strides to redeem USDC and change banking partners. But it’s important to remember that the stablecoin market can be fickle and that competition can be fierce.
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