Circle Commits to Covering USDC Shortfalls – Ensures Redemption at 1:1 with USD

cryptonews.com:

USDC issuer Circle has pledged to cover any shortfall in the stablecoin's reserves if it does not receive the entirety of the $3.3 billion held at now-collapsed Silicon Valley Bank.

In a Saturday blog post, Circle said that the company is prepared to cover any shortfall in the USDC reserves that materialize from their exposure to SVB using corporate resources, which might even involve external capital.

The announcement comes after it was revealed that Circle has $3.3 billion of its $40 billion USDC reserves held in an account at the fallen lender Silicon Valley Bank. 

In the blog post, the company detailed it made wire transfer requests on Thursday, but they were not completed by the end of Friday. "We have reason to believe that under applicable FDIC policy, transfers initiated prior to a bank entering receivership would have otherwise been processed normally," the company added. 

In other words, Circle expects the FDIC, which took over SVB on Friday, to allow transactions that were initiated before the agency's takeover to settle in the ordinary course. 

The company further noted that USDC liquidity operations will resume as normal when banks open on Monday morning in the United States. "As a practical matter, our teams are well prepared to handle significant volume, built on the strong liquidity and reserve assets discussed below."

Silicon Valley Bank, one of the most popular lenders to Silicon Valley tech and growth startups, failed on March 10, falling into the hands of the Federal Deposit Insurance Corporation (FDIC). On Friday, the federal agency took control of the bank and created the Deposit Insurance National Bank of Santa Clara, which now holds the insured deposits from SVB.

The USDC issuer also ensured users that