Stablecoin USDC lost its peg to the dollar amid the bankruptcy of the largest US bank Silicon Valley
stablecoin USD Coin (USDC) has lost its peg to the US dollar, falling to $0.94 on the Kraken crypto exchange, its lowest price since April 2021. Being the second largest stablecoinohm, with a market cap of $42 billion, traded at $0.984 a unit on Saturday, in breach of the company’s commitment to peg stablecoinbut to the US dollar.
The value of USDC began to decline sharply after its issuer, Circle Internet Financial, admitted that it was unable to withdraw $3.3 billion from Silicon Valley Bank (SVB). This amount was a reserve to secure USDC. The largest bank in California serving startups has filed for bankruptcy, which we wrote about in a previous article.
As early as March 9, Circle tried to withdraw all of its funds from SVB, but 2 days later, on March 11, the company stated that wire transfers had not been fully processed and that $3.3 billion of USDC reserve was still in SVB.