After the downfall of Silicon Valley Bank, Circle chose a new banking partner.
Circle, a peer-to-peer payments technology company that manages a popular stablecoin known as USD Coin (USDC), has chosen a new banking partner after, on March 12th, its former partner Silicon Valley Bank was shut down.
According to the announcement shared by Circle’s Chief Executive Officer (CEO) Jeremy Allaire, the stablecoin issuer’s new banking partner is New Jersey-based Cross River Bank.
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In the press release shared on March 13th, Circle stated that with the help of its new banking partner, Circle is set to open “automated USDC minting and redemption for customers” this week.
When talking about the matter, Circle’s CEO Jeremy Allaire highlighted that the “trust, safety and 1:1 redeemability” of USDC is very important to Circle. On top of that, Allaire added:
We are heartened to see the U.S. government and financial regulators take crucial steps to mitigate risks extending from the banking system. We’ve long advocated for full-reserve digital currency banking that insulates our base layer of internet money and payment systems from fractional reserve banking risk.
In the statement, Circle emphasized that 8% of the USDC total reserve (around $3.3 billion) will be fully available on March 13th.
It is worth noting that the partnership with Cross River Bank wasn’t the only change in Circle’s banking relationships. The firm had “expanded relationships” with the Bank of New York Mellon (BNY Mellon). The latter-mentioned bank has already offered Circle custody services. On top of that, Circle revealed that it will transfer the remaining cash from Silicon Valley Bank (SVB) to BNY Mellon.
At the end of its announcement, Circle claimed it doesn’t have exposure to another now shut-down crypto-friendly bank, Signature.
After the news about Circle having exposure to Silicon Valley Bank broke, the value of USD pegged stablecoin USDC fell to as low as $0.93. At the time of writing, USDC retails for $0.9913, recording a 1.91% increase in the last 24 hours.