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Blockchain payment tech company and USD Coin issuers Circle recently confirmed that wires initiated to remove balances have not yet been processed, leaving over three billion of its forty billion dollars worth of USDC reserves at Silicon Valley Bank.
Concerns have been growing over USDC late this week due to Circle disclosing in its latest audit that as of 31st January, 8.6 Billion USD (around twenty percent of its reserves), was held up in a couple of financial institutions, including the recently bankrupted Silvergate, and shuttered Silicon Valley Bank.
In a recent statement, a Circle spokesperson also mentioned that Silicon Valley Bank is
“One of six banking partners Circle uses for managing around twenty five percent of USDC reserves held in cash. While we await clarity on how the FDIC receivership of SVB will impact its depositors, Circle and USDC continue to operate normally.”
Adding to the stablecoin related woes, around thirty minutes after Circle’s latest statement, the exchange announced that it is “temporarily pausing USDC:USD conversions over the weekend while banks are closed.”
The firm further mentioned,
“During periods of heightened activity, conversions rely on USD transfers from the banks that clear during normal banking hours. When banks open on Monday, we plan to re-commence conversions.”
Coinbase added,
“We are temporarily pausing USDC:USD conversions over the weekend while banks are closed. During periods of heightened activity, conversions rely on USD transfers from the banks that clear during normal banking hours. When banks open on Monday, we plan to re-commence conversions.”
Such a move highlights the difficulty that centralized digital asset establishments are facing now that Silvergate is longer providing them with round the clock banking services.
On the same day, Binance also announced via its Twitter handle that the exchange has
“Temporarily suspended auto-conversion of USDC to BUSD due to current market conditions, specifically related to high inflows & the increasing burden to support the conversion.”
The exchange has temporarily suspended auto-conversion of USDC to BUSD due to present market conditions, specifically related to high inflows & the growing load to support the conversion.
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