USDC issuer, Circle, has issued a statement updating investors on its cash reserves, which are currently stuck with Silicon Valley Bank (SVB). This follows the recent collapse of SVB, which has left the fate of USDC’s funds in question.
Possible shortfall and delays
Circle has revealed that it may not regain 100% of its funds held by SVB, and it could take some time to retrieve them. This is because the FDIC issues IOUs and advanced dividends to deposit holders, which could cause delays.
Assurance to customers
Despite the uncertainty, Circle has assured its customers that it will cover any shortfall caused by SVB’s collapse by pooling its corporate resources and seeking external capital if necessary. The company has disclosed that SVB holds $3.3 billion of USDC’s cash reserves, which make up a 25% portion of the USDC reserves held in cash.
