Circle, the issuer of the USDC stablecoin, recently reported on its exposure to Silicon Valley Bank (SVB) and its progress in clearing its backlog of minting and redemption requests for the stablecoin. This report comes after USDC investors panicked upon hearing about Circle’s connection to the now-defunct bank.

In its latest report on USDC Reserves, Circle confirmed that it held 8% of USDC reserves, equivalent to over $3 billion, at SVB. The bank’s closure and subsequent seizure of deposits led to a massive outflow of USDC reserves, causing the stablecoin to de-peg from its dollar value and hit a record low.

However, Circle’s recent statement indicated that it had made significant progress in clearing its backlog of USDC requests, including minting almost $800 million and redeeming $3.8 billion. In addition, the issuer firm acknowledged the support and patience of its customers during this challenging period.

To circumvent the situation, Circle deepened its partnership with the Bank of New York Mellon and collaborated with a new banking partner, Cross River Bank, to facilitate US and international transfers.

Before its closure, SVB had announced its plan to raise $2.25 billion to boost its balance sheet after suffering a $1.8 billion loss from asset sales.

However, the bank’s efforts to raise capital failed, leading to its closure and marking the second-largest implosion of a financial firm in the US.

Circle’s latest report on USDC Reserves and attestation from Deloitte, a global audit company, confirmed the connection to SVB. 

However, Circle’s progress in clearing its backlog of USDC requests and its strategic partnerships with BNY Mellon and Cross River Bank offer hope for a brighter future for the stablecoin.

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