Circle’s USDC Stablecoin Plummets by $10 Billion, Sending Shockwaves Through Financial Industry

Circle’s USDC stablecoin has experienced a 10 billion dollar loss in value over the past two weeks, dropping to 32.5 billion dollars.

Circle’s USDC stablecoin has experienced a 10 billion dollar loss in value over the past two weeks, dropping to 32.5 billion dollars.

Over the past two weeks, Circle’s USDC stablecoin has experienced a loss of approximately 10 billion dollars in value and redemptions continue. Despite assurances from Circle that redemptions will be backed by reserves, the problems with the stablecoin persist. The problems began in March with news that Circle could withdraw its $3.3 billion reserve fund from Silicon Valley Bank and that USDC could separate from the US dollar. After US federal banking regulators provided assurances that all customer deposits at Silicon Valley Bank and Signature Bank would be refunded, Circle CEO Jeremy Allaire announced that operations would continue. However, redemptions continue.

Last week, Allaire tweeted that sales were increasing due to a wider risk mitigation process among investors coming from US banks and projects exposed to regulatory risks. Allaire stated that Circle will continue to do “what we always do” for the stablecoin to remain pegged to one dollar and that its successful redemptions, including a stress test conducted last week, have never been lost.

In conclusion, Circle’s USDC stablecoin has experienced a significant loss of value recently and redemptions continue. While Circle has provided assurances that redemptions will be backed by reserves, investor concerns persist. Although the assurances provided by US federal banking regulators have had positive effects, the stablecoin market is still going through a delicate period.

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