Breaking: USDC slowly repegs on unconfirmed reports of SVB resolution

The NFT Unicorn fbc868fe-b011-401b-bfc4-6343a95935ea Breaking: USDC slowly repegs on unconfirmed reports of SVB resolution Crypto News

According to a post on Mar. 11 by Bob Elliot, chief investment officer of unlimited funds, relief efforts may already be underway less than 72 hours after the collapse of prominent American tech bank Silicon Valley Bank (SVB). Elliot claimed, among many items, that “big banks actively working on buying svb business,” the U.S. Federal Deposit Insurance Corporation (FDIC) is planning to cover 95% of uninsured depositors to the acquirer, and that “50pct of uninsured paid out next wk.”

Cointelegraph reported earlier today that Circle, the issuer of the USD Coin (USDC) stablecoin, had over $3.3 billion in reserves stuck in the troubled bank out of a total of over $40 billion. In addition, SVB reportedly custodied an estimated $5 billion in funds for prominent blockchain venture capital firms such as a16z, Pantera Capital, and Paradigm. Earlier today, USDC depegged from its one-to-one U.S. dollar peg to trade as low as $0.87 apiece before slowly re-pegging to trade at $0.95 at the time of publication.

Although the reports are currently unverified, multiple sources confirm that many different tracks to resolution are being worked on and that depositors will get back “at least 50% of their deposits” by next week. “Long term it’s likely they get 90%+ back and very possible no depositors loses a single $,” Hal Press, founder of investment firm North Rock LP, stated

On the same day, Mike Moïse, Associate DirectorAssociate Director of business advisory firm CrossCountry Consulting, also made similar comments, citing secondary sources:

“SVB’s customers will have $250k unfrozen on Monday, and ~50% of the remaining balance dividended to depositers within 1-2 days of Monday (money market accounts likely to get 100%). The remainder will be dependent upon future recoveries; most recovery will be within 3-6 months.”

Previously, DeFi analyst Loki Zeng estimated that the net value of USDC is “$0.885 at extreme situation and $0.985 at normal situation” and commented: “even if there is an issue, it won’t be as severe as FTX.” Alex Svanevik, CEO of blockchain analytics firm Nansen, also said that the Circle and USDC “can make it,” so long as “top-class execution” is conducted in the next few days.



Source: Cointelegraph