Stablecoin USDC falls below USD 1 and faces a USD 3.3 billion exposure to Silicon Valley Bank

USDC reserves tied up at Silicon Vally Bank account for about 8% of its total reserves of $40 billion, according to Circle.

Crypto exchange Coinbase announced on Friday that it was temporarily suspending conversions between stablecoin USDC and USD over the weekend. USDC USDCUSD,
-1.75%,
co-powered by Coinbase COIN,
-8.00%
and Circle, is the second largest stablecoin in the world.

Coinbase said it would resume conversions between USDC and USD on Monday. “During periods of heightened activity, conversions will be based on USD transfers from banks processed during normal business hours,” the company tweeted on Friday.

“Your assets remain secure and available for on-chain shipments,” Coinbase added.

Investors have withdrawn more than $2.6 billion in 24 hours as of 3 a.m. Saturday, amid concerns about contagion to the banking system from the collapse of Silicon Valley Bank, according to data from CryptoQuant.

While most of USDC’s reserves are invested in government bonds, nearly $9 billion of that was held in cash at banks, including the Bank of New York Mellon BKCitizens Trust Bank, Customer Bank, New York Community Bank, a division of Flagstar Bank, NA, Signature Bank SBNYSilicon Valley Bank and Silvergate Bank S.I As of 31.01., acc a medical certificate March.

SVB Financial Group’s Silicon Valley bank on Friday became the first major bank to be banned by the Federal Deposit Insurance Corp since the 2008 global financial crisis. was taken over when a once-powerful lender to technology companies in the region of the same name suddenly went under.

The Federal Deposit Insurance Corporation has taken over $175 billion in deposits at Silicon Valley Bank. FDIC’s standard insurance covers up to $250,000 per depositor, per insured bank, and for each category of account holder.

The rest of the depositors are uninsured — they’ll receive an advance dividend within the next week and receive bankruptcy certificates for their balances, the FDIC said. Whether and how many depositors with over $250,000 would get their money back depends on the amount of money FDIC will receive from the sale of Silicon Valley Bank’s assets.

Circle and Coinbase representatives did not respond to requests for comment.