USD Coin Regains $1 Peg As Circle CEO Allaire Thanks Feds, Reveals New Banking Tie-Ups

Jeremy Allaire, CEO and co-founder of Circle, on Sunday thanked the U.S. government and financial regulators for their decisive action to address the risks associated with the fractional banking system.

What Happened: Circle’s USD Coin USDC/USD is climbing back to its $1 peg, following confirmation from its CEO Allaire, that its “USD reserves remain safe” and the firm has new banking partner Cross River Bank CSRVF. "Expanded relationships also include USDC redemptions via BNY Mellon BK," Circle said in a blog post.

On Sunday, Allaire applauded the U.S. government and the Federal Reserve for taking action and making a $25 billion funding program available to help banks facing liquidity issues such as Silicon Valley Bank SIVB.

Update thread on USDC

We were heartened to see the US government and financial regulators take crucial steps to mitigate risks extending from the fractional banking system.

100% of deposits from SVB are secure and will be available at banking open tomorrow.
— Jeremy Allaire (@jerallaire) March 12, 2023

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The weekend saw the price of USDC drop as low as $0.87, as concerns mounted over the $3.3 billion worth of USDC reserves being held at SVB.

Circle announced that due to the implosion of crypto-friendly Signature Bank SBNY, they are no longer able to process USDC minting and redemption through SigNet. The firm said it will have to temporarily rely on settlements through BNY Mellon as an alternative solution.

Bitcoin BTC/USD and Ethereum ETH/USD jumped 8.25% and 8.43%, respectively, in the past 24 hours, trading at $22,308 and $1,600.