The US government has announced measures to protect SBV and Signature Bank depositors. After this news, USDC practically restored parity with the dollar.
Treasury Secretary Janet Yellen, Fed Chair Jerome Powell and FDIC Chief Martin Grunberg jointly announced Sunday night that they were accepting “ decisive action” to protect the US economy and build confidence in the banking system.
Secretary Yellen approved actions that will allow the FDIC to complete the Silicon Valley bank’s decision in a way that fully protects all savers. Contributors will have access to all their money from Monday, March 13th. The taxpayer does not bear any losses associated with the reorganization of Silicon Valley Bank, ”the official statement says.
Same story with Signature Bank, another cryptocurrency-friendly U.S. bank, closed on Sunday by the New York City Department of Financial Services. After Silvergate and SVB, this is the third US bank to collapse in less than a week. All of them had several crypto projects as clients.
“ We are also announcing a similar systemic risk exemption for Signature Bank. […] All depositors in this institution will be fully refunded. As with the Silicon Valley bank resolution, there will be no loss to the taxpayer,” the document says, although it does specify that shareholders and certain unsecured creditors will not be protected.
As the USDC stablecoin, which fell against the dollar on Saturday, approached parity with the dollar at around $0.97 yesterday, its price instantly surged above $0.99 following the US bailout announcement late in the evening.
Overnight, Circle reported that the $3.3 billion reserve held at Silicon Valley Bank would “ fully available” on Monday morning.
We are encouraged that the US government and financial regulators are taking important steps to mitigate the risks associated with the banking system,” commented CEO Jeremy Aller.
The USDC issuer also indicated that the holdings of its digital stablecoin, which is worth about $41 billion today, do not include funds at Signature Bank.
DAI, another major stablecoin that has also fallen off the dollar, has also nearly regained parity at around $0.99.
At the same time, the total market capitalization of cryptocurrencies exceeded $1,000 billion. Yesterday at the end of the day, Bitcoin (BTC) began to rise again. Its price rose almost 9% in 24 hours to around $22,450.
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