Last Updated on March 11, 2023 by Bitfinsider
Binance and Coinbase both announced on Friday night that they would briefly suspend USDC conversions as the fallout from Silicon Valley Bank continues.
The steps were taken in response to concerns that Circle, the company behind the USDC stablecoin, had some of USDC’s cash reserves at Silicon Valley Bank, which was closed down by California’s financial regulator on Friday. (USDC was first introduced by Centre, a collaboration between Bitcoin and Circle.)
Binance has briefly halted the automatic conversion of USDC to BUSD.
Following Binance’s announcement, Coinbase, the biggest cryptocurrency exchange in the United States, announced that it would suspend USDC conversion to USD during the weekend when banks are closed.
The failure of SVB on Friday sent shockwaves through the technology sector. Several businesses, including Circle, Pantera, Avalanche, and bankrupt crypto firm BlockFi, have revealed their current exposure to the California bank.
Finally, Circle revealed late Friday night that $3.3 billion in cash backing USDC is still held in Silicon Valley Bank. Silicon Valley Bank is one of six banks Circle employs to manage 25% of its USDC reserves, according to the firm.
“During periods of heightened activity, conversions depend on USD transfers from banks that clear during normal banking hours,” Coinbase explained, without naming Silicon Valley Bank specifically, and adding that conversions would resume on Monday once banks reopened.
Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.