The popular stablecoin USDC faced significant sell pressure citing the downfall of the Silicon Valley Bank.
USDC is second ranked but top trusted stablecoin in the crypto sector. Circle is the backed company behind this stablecoin, which manages the whole financial operations behind USDC stablecoin. In terms of trust level, USDC grabbed huge popularity in the crypto sector from May 2022.
On 11 March 2023, USDC stablecoin plunged by approximately 4.4% within a few hours because of high sell pressure.
The lowest 24 hours pegged price of USDC was $0.956 and the current price of USDC stablecoin is $0.995, which means USDC is down by 0.5% from its pegged value $1.
The real reason behind this critical situation for USDC is unconfirmed but few reports claimed that Circle is holding a significant unconfirmed amount of funds in a failed Bank.
On the same day, Circle confirmed that its stablecoin will function smoothly without any problem but confirmed that 25% of USDC reserves are in the hands of Silicon Valley Bank.
Silicon Valley Bank
Silicon Valley Bank was closed by the California Department of Financial Protection and Innovation. This bank was popular in the crypto sector because of its support for the new startups & VCs.
All insured deposits at Silicon Valley Bank were immediately transferred to DINB, in short Bank customers will not face big struggles.
The stock price of Silicon Valley Bank also closed with 63% downfall.
Earlier this, two days ago, Silvergate capital corporation announced the company plan to liquidate its Silvergate Bank to compensate the customers.