Coinbase Reinstates USDC/USD Conversion, Biden Says Banking System Is Safe
- Crypto exchange Coinbase reinstated USDC/USD conversions on Monday after turbulence over the weekend.
- Circle previously halted stablecoin minting after troubles in the U.S. banking system involving major banks like Silicon Valley Bank and Signature.
- President Joe Biden said that the banking system is safe but executives at SVB and Signature must be fired.
Major crypto exchange Coinbase restarted conversions for the USDC/USD pair on Monday following turbulence with U.S. banking partners over the weekend. Coinbase previously halted conversions on Saturday citing “periods of heightened activity” amid the closure of local banks.
The California-based crypto company reported $240 million in corporate cash balance at Signature, a crypto-friendly bank seized by the Federal Deposit Insurance Corporation (FDIC). A joint statement from the U.S. Treasury, Federal Reserve, and FDIC assured Coinbase of full recovery.
Circle – $3.3 Billion Of USDC’s Reserves Held On Silicon Valley Bank
USDC issuer Circle confirmed that it held $3.3 billion of its $40 billion stablecoin reserves with Silicon Valley Bank, a top 20 U.S. bank recently closed down by the FDIC after the bank faced liquidity issues.
Over the weekend, Circle’s USDC token lost its 1:1 peg with the U.S. Dollar after the company confirmed its exposure to SVB. USD Coin has since regained its dollar peg and traded at $1 on several centralized exchanges and crypto trading venues.
Circle CEO Jeremy Allaire stressed that deposits with SVB are 100% secure and that the stablecoin issuer will work with regulators to recover all funds where possible. Allaire also noted that Circle signed a “new automated settlement” partnership with Cross River Bank.
SVB And Signature Execs To Get The Sack – POTUS Joe Biden
During an address on Monday, U.S. President Joe Biden told citizens that the banking system remains safe despite significant on banking institutions over the weekend. President Biden said taxpayers will not suffer losses and that “every American should feel confident that their deposits will be there, if and when they need”.
POTUS Biden added that the management at SVB and Signature will be fired after the FDIC closed both banks, greatly limiting the crypto industry’s access to banking services. President Biden also called for regulators to assess why both banks collapsed and resolve the debacle in a way that fully protects depositors.
A joint statement on Sunday said regulators were working toward a resolution.
After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors.