• Signature Bank’s sudden failure left Circle’s USDC stablecoin in limbo.
• Circle has established a new partnership with Cross River Bank, which will provide automated minting and redemption for USDC stablecoin.
• Circle’s USDC operations resumed on Monday morning, ensuring seamless settlement and boosting confidence in the stability of the stablecoin.
Signature Bank Failure
Signature Bank was a key financial institution to the crypto industry, and its sudden failure has left a major hole in the industry’s backend infrastructure. Signet, a blockchain-based real-time payments system that’s supposed to work 24/7, was used by Circle, Coinbase, and many crypto trading firms. But with the death of Signature, Signet is also not functional.
Circle’s Response
Circle CEO, Jeremy Allaire, confirmed that due to the failure of Signature Bank they had to find a new transaction banking partner for USDC operations. Allaire announced that Circle has established a new partnership with Cross River Bank which will provide automated minting and redemption for USDC stablecoin. This new partnership allowed Circle to resume USDC operations starting from Monday morning ensuring seamless settlement and boosting confidence in the stability of the stablecoin.
Impact of Signature Bank Failure
The collapse of Signature Bank has left a major hole in the industry’s backend infrastructure as it was a critical financial institution for crypto traders and investors alike. As such, its demise leaves many questions unanswered about how much funds were held by Silicon Valley Bank (SVB) at any given time or whether other banks backed up these funds too are affected by this closure or not?
USDC’s Fate
USDC lost its peg to the US dollar on Friday following uncertainty about how much of its funds were held by Silicon Valley bank (SVB). According to Circle they held $3.3 billion or 8% of funds backing USDC at SVB however there were no reserves held with Signature bank as it was closed by regulators on same day as well.
Conclusion
The recent failures of Silicon Valley Bank & Signature Banks have had an impact on Circle’s crypto industry business dealings however thanks to their quick response & establishment of partnerships with Cross River Banks all seems back on track & operational now with regards to automated minting & redemption services for USDT StableCoin providing renewed confidence & assurance among users & traders alike!