The USDC stable cryptocurrency, lost its parity with the dollar this Saturday after the issuing entity, the American company Circle, announced that it has about 8% of its reserves housed in Silicon Valley Bank (SVB).
USDC (also known as USD Coin), one of the largest stablecoins and backed by US dollars, traded as low as 87 cents todaylosing the parity with 1 dollar for which it is designed, according to The Wall Street Journal.
The movement came hours after the Circle company indicated via Twitter that it has 25% of its cash reserves distributed among six banks. and one of them is SVB, which collapsed this Friday and had to be intervened by US regulators.
Circle said it had started drawing its reserves from SVB on Thursdaybut as of yesterday it had not recovered some 3,300 million dollars of the 40,000 it stored, around 8% of the total.
Those problems led two large platforms to take action.: Coinbase announced that it was pausing USDC to US dollar conversions over the weekend due to high volume of requests, and Binance temporarily suspending automatic conversion from USDC to Binance USD, its token.
Another stablecoin partially backed by USDC, Dai lost parity with the dollar and fell to 90 cents on Saturday, according to the Journal.
The collapse of SVB, the largest bank failure in the US since the 2008 crisis and one of the most important in history, it led investors to look for safe values and for the second day it left clear setbacks in the stock market.