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Circle CEO: USDC to Resume Liquidity Operations on Monday and Maintain 1:1 Value With US Dollar

Cointime Official

The CEO of Circle, Jeremy Allaire, declared in an official statement that USDC's liquidity operations will recommence as usual once banks open on Monday morning in the US. As a regulated payment token, USDC will continue to be exchangeable one-to-one with the US Dollar.

This announcement follows a de-peg of the stablecoin USDC. USDC's price dipped as low as $0.87 before stabilizing at $0.97 at the time of writing. USDC issuer Circle holds $3.3 billion of its reserve at Silicon Valley Bank.

"USDC is 100% collateralized with a combination of cash and US Treasuries. " Circle wrote in the statement. "Specifically, USDC is currently collateralized 77% ($32.4B) with US Treasury Bills (with a three month or less maturation period), and 23% ($9.7B) with cash held at a variety of institutions, of which SVB is only one.  "

Circle affirmed that it would utilize its corporate resources to compensate for any shortage in case SVB fails to return the entire $3.3 billion cash reserves, as the firm stated:

"However, it is also possible that SVB may not return 100% and that any return might take some time, as the FDIC issues IOUs (i.e., receivership certificates) and advanced dividends to deposit holders. In such a case, Circle, as required by law under stored-value money transmission regulation, will stand behind USDC and cover any shortfall using corporate resources, involving external capital if necessary."

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