Circle, the digital currency company behind USDC stablecoin, has announced that it has redeemed $2.9 billion USDC and minted $700 million USDC.
It comes amidst the instability of the US banking system and the failures of Silicon Valley Bank and Signature Bank, Circle’s core transaction banking partners.
In a blog post, Circle emphasized the importance of a stable US banking system for the global financial system and the operations of fiat-backed stablecoins.
The company acknowledged the actions taken by the US Treasury, Federal Reserve, and FDIC on March 12th to ensure the safety and accessibility of deposits for ordinary depositors.
Since the failures of its core banking partners, the company has been working around the clock to restore USDC liquidity operations, including bringing on new transaction banking partners.
The company began processing minting and redemption requests on March 13th, when the US banking system re-opened, and is currently working through the backlog.
Circle also announced that it is taking initiatives to strengthen the USDC reserve. The cash portion of the reserve is now held at BNY Mellon, while most of the reserve is invested in the Circle Reserve Fund, managed by BlackRock and custodied at BNY Mellon.
However, limited funds are held at transaction banking partners in support of USDC minting and redemption, according to the post.
The announcement from Circle highlights the increasing importance of stablecoins in the global financial system and the need for a stable banking infrastructure to support their operations.
As Circle continues to add new transaction banking partners with 24/7/365 capabilities, it remains committed to providing a secure and accessible stablecoin for its users.
Circle’s CSO Raises Concerns About Traditional Banks’ Risks To Crypto
In another related news, the CSO at Circle, Dante Disparte, has expressed concerns about traditional banks’ systemic risks to the cryptocurrency industry in a recent interview.
Disparte believes that the lack of confidence in banks makes it challenging for crypto companies to operate, as recent bank failures have shown that they are introducing risk to crypto assets.
Despite these concerns, Disparte thinks that the crypto industry and banks can rise together, and many financial institutions are already using blockchain infrastructure for payments and digital asset custodian solutions.
However, Disparte stresses the need for a new USDC to provide a digital form of dollars to protect investors from economic risks and calls for comprehensive government-level protection for consumers.