The CEO of cryptocurrency firm Circle announced on Sunday that the company would no longer be able to facilitate minting and redemption through Signature Bank following its closure by the state of New York. Instead, Circle will manage settlements through BNY Mellon.
Circle, known for the stablecoin USD Coin (USDC), expressed plans to establish a new transaction banking partner for automated minting and redemption, potentially as early as Monday, according to Jeremy Allaire, Co-Founder and CEO of Circle, in a tweet.
The closure of Signature Bank by state regulators, which occurred just two days after the shutdown of Silicon Valley Bank (SVB) by California authorities, has caused a disruption in global markets and stranded billions of dollars in deposits.
Jeremy Allaire noted, “With the closure of Signature bank announced tonight, we will not be able to process minting and redemption through SigNet; we will be relying on settlements through BNY Mellon.”
In response to the collapse of Silicon Valley Bank, Allaire assured that all deposits from SVB were secure and would be accessible when banks opened on Monday morning in the United States. He also emphasized that 100% of USDC reserves were safe, and the remaining SVB cash would be transferred to BNY Mellon.
USDC experienced a loss of its dollar peg, reaching an all-time low on Saturday, but rebounded after Circle assured investors that it would maintain the peg despite exposure to the failed Silicon Valley Bank. Circle disclosed on Friday that $3.3 billion of its $40 billion USDC reserves were held at Silicon Valley Bank.