Crypto exchange Coinbase said on Friday that it is temporarily suspending conversions between stablecoin USDC and USD over the weekend, after stablecoin creator Circle Said About $3.3 billion, or more than 8% of USDC reserves of more than $40 billion, is held at the Silicon Valley bank, which collapsed on Friday.
which is co-supported by Coinbase COIN,
and Circle, the second largest stablecoin in the world.
Coinbase said it would resume conversions between USDC and USD on Monday. “During periods of increased activity, conversions depend on USD transfers from banks that clear during normal banking hours,” the company tweeted on Friday.
“Your assets remain secure and available for sending on-chain,” Coinbase said.
Investors pulled out more than 2.3 billion USDC in the 24 hours through Friday evening, according to Nansen data, amid concerns about contagion of the banking system from the collapse of Silicon Valley Bank.
While most USDC reserves are invested in Treasuries, about $9 billion of that was held in cash at banks, including Bank of New York Mellon. bkCitizens Trust Bank, Client Bank, New York Community Bank, a division of Flagstar Bank, NA Signature Bank SBNYSilicon Valley Bank and Silvergate Bank SI as of January 31 a verification report in March.
SVB Financial Group’s Silicon Valley bank on Friday became the first major bank since the global financial crisis in 2008 to be taken over by Federal Deposit Insurance Corp following the sudden demise of the once-mighty lender to technology companies in its namesake region.
The Federal Deposit Insurance Corporation holds more than $175 billion in deposits at Silicon Valley Bank. The FDIC’s standard insurance covers up to $250,000 per depositor per insured bank for each account ownership category.
The FDIC said the remaining depositors are not insured – they will be paid the advance dividend within the next week and will receive a certificate of receipt for their balance. Whether depositors over $250,000 will get their money back depends on how much money the FDIC gets from selling Silicon Valley bank properties.
Representatives for Circle and Coinbase did not respond to requests seeking comment.