Circle, a leading global crypto finance company, has announced that it has partnered with Cross River Bank to produce and redeem USD Coin (USDC), its flagship stablecoin pegged to the US dollar. Cross River Bank is a well-recognized leader in providing banking services to fintech and crypto firms, including Visa and Coinbase.
Circle has partnered with Bank of New York Mellon to provide redemption services for USDC. Bank of New York Mellon is a well-known and respected institution that already provides custody services for Circle’s reserves. This partnership will help to ensure that USDC is a reliable and stable currency.
The announcement comes after a harrowing weekend that saw Circle’s flagship USDC stablecoin break its peg to the dollar, falling below $0.90 early on Saturday. However, a series of moves by banks and regulators restored confidence in the token, and at the time of publication, USDC has recovered and trades at $1.05.
During the weekend, Circle issued a reassuring press release confirming that 100% of USDC reserves are safe and secure. The company also announced that it would complete the transfer of the remaining Silicon Valley Bank (SVB) cash to BNY Mellon, and liquidity operations for USDC would resume at banking open on Monday. This would ensure that users can continue to use USDC as they normally would.
Circle’s announcement also noted that it had no exposure to Silvergate, the crypto-friendly bank that voluntarily liquidated its holdings as part of a takeover process by federal regulators. This weekend’s USDC turmoil was part of a broader financial catastrophe that started due to the collapse of SVB, the 16th-largest bank in the United States and a financial pillar of the tech and venture capital world. This weekend’s USDC turmoil was just the latest development in a broader financial catastrophe that started due to the collapse of SVB, the 16th-largest bank in the United States and a financial pillar of the tech and venture capital world.
The failure of SVB triggered a panic as thousands of companies, including Circle, could not access billions in deposits. However, the Federal Reserve and other agencies stepped in to calm markets by announcing that depositors at SBV would be made whole.