In the words of Jeremy Allaire, “Trust, safety and 1:1 redeemability of all USDC in circulation is of paramount importance to Circle, even in the face of bank contagion affecting crypto markets.”
Stablecoin issuer Circle has partnered with Cross River Bank for redeeming and minting USD Coin (USDC) after the collapse of the firm’s previous banking partner, Silicon Valley Bank (SVB).
On Saturday, Circle confirmed that the firm had a $3.3B exposure to SVB, causing a mass selloff of USD Coin (USDC) and a subsequent decline in the stablecoin’s price.
A recent tweet by Jeremy Allaire, co-founder of Circle, said appointing Cross River Bank as its banking partner will enable an automated settlement facility for USDC holders. Circle also reassured the crypto community by claiming that USDC reserves remain secure.
As per its press release, the firm will transfer the $3.3B sum from SVB to Bank of New York Mellon. BNY Mellon is responsible for providing custodial services to Circle, with BlackRock managing its active liquidity and assets. BNY Mellon currently holds $9.7B or 23% of USDC cash reserves.
USDC’s prices steadily rose following Circle’s announcement. As of writing, the stablecoin has regained its 1:1 peg to US Dollar (USD).