The U.S. government announced measures to protect the depositors of SBV and Signature Bank. As a result of the news, the USDC has almost regained parity with the dollar.
Indeed, after dropping to $0.87 over the weekend, Circle’s stablecoin USD Coin (USDC) is finally back at parity with the USD, thanks to these interventions that will guarantee the deposits of the customers of Silicon Valley Bank, which suddenly closed its doors.
Secretary Yellen approved actions that will allow the FDIC to complete the resolution of Silicon Valley Bank in a manner that fully protects all depositors. Depositors will have access to all of their money beginning Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer,” reads an official statement.
We are also announcing a similar systemic risk exception for Signature Bank […] All depositors of this institution will be fully refunded. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer, the document states, though it does note that shareholders and certain unsecured creditors will not be protected.
While the USDC stablecoin, which was falling against the dollar on Saturday, was closing in on parity with the greenback yesterday at around $0.97, its price instantly jumped to over $0.99 after the U.S. bailout announcement late in the evening.
We are encouraged to see the U.S. government and financial regulators taking critical steps to mitigate risks to the banking system, commented CEO Jeremy Allaire.
The USDC issuer further noted that the reserves of its digital stablecoin, which now weighs about $41 billion, do not include funds at Signature Bank.
DAI, another major stablecoin that had also stalled against the dollar, also nearly regained parity at about $0.99.