Accordingly, Circle said that USDC can be used 24/7/365 on chain, issuance and redemption are constrained by the working hours of the U.S. banking system.
The company added: “USDC liquidity operations will resume as normal when banks open on Monday morning in the United States.”
Converting USDC back to USD will resume normally on Monday morning (US time), when the US banking system reopens, with the rate remaining at 1 USDC for 1 USD.
As for collateral assets, USDC is being backed by $32.4 billion of short-term US Treasury bonds (maturity 1-3 months) and $9.7 billion in cash deposited in many banks. BNY Mellon Bank is the custodian for those bonds, and the custodian is BlackRock Asset Management Group, a well-known name in the US financial industry. Circle commits to the other bonds with high liquidity and guaranteed value by the US Government.
In addition, $9.7 billion in cash is being held in three banks, including $5.4 billion at BNY Mellon, $3.3 billion at Silicon Valley Bank and $1 billion at Customers Bank.
After Silicon Valley Bank had liquidity difficulties and was ordered by the United States Federal Deposit Insurance Corporation (FDIC) to close and confiscate assets on March 10, the amount of $3.3 billion on temporarily inaccessible until Monday (March 13). This amount is equivalent to 7.83% of the total collateral for the stablecoin.
Circle revealed that it sent a request to transfer money from Silicon Valley Bank to other banking partners on Thursday (March 9), before the FDIC intervened, but still had to wait for the direction of the FDIC to handle the case.
Circle also acknowledged the possibility that it may not be possible to get 100% of the money stuck on Silicon Valley Bank, thus stating that it will still fully support USDC by covering the shortfall with company assets or raising capital if necessary.
Stablecoin USDC price after slipping to $0.87 on March 11, recovered to $0.96 thanks to reassuring statements from Circle. The market capitalization of USDC in the last 24 hours has gone from $43.7 billion to $35.9 billion, then back to $39.5 billion at the time of writing.