Stablecoins Rebound as Circle Announces It will ‘Cover Any Shortfall’ in $USDC Reserves

Circle, the $USDC issuer, responded to the $USDC depeg with a letter stating that if Silicon Valley Bank's $3.3 billion in reserves are not returned 100%, Circle will stand behind $USDC and cover any shortfall using corporate resources, involving external capital if necessary.

Circle said, "$USDC liquidity operations will resume as normal when banks open on Monday morning in the United States. Circle’s teams are well prepared to handle the significant volume. As a regulated payment token, $USDC will remain redeemable 1 for 1 with the U.S. Dollar."

Specifically, $USDC is currently collateralized 77% ($32.4B) with US Treasury Bills (with a three month or less maturation period), and 23% ($9.7B) with cash held at a variety of institutions, of which SVB is only one.

After Circle's announcement, $USDC has rebounded to $0.979924, according to TokenInsight data.

In addition, decentralized stablecoins $DAI, $FRAX, and $USDD have rebounded to around $0.98.