According to the contents of Circle's audit report in January this year, Circle's stablecoin $USDC has reserves in a number of regulated financial institutions in the United States, including Silicon Valley Bank and Silvergate. The report was reviewed and certified by Deloitte. However, on March 4, Circle said it had transferred $USDC reserve deposits held by Silvergate to other banking partners.
Circle's $USDC Jan. 2023 Reserve Report:
Circle's 2022 annual report shows that for asset reserves, about 80% of USDC reserves are 3-month U.S. Treasuries. By the end of January 2023, U.S. Treasuries reserves will be transferred to be managed by BlackRock and held in custody by Bank of New York Mellon, the world's largest custodian. The remaining approximately 20% is cash, held by each of the eight U.S. regulated banking partners. These reserves are reviewed and certified by Deloitte on a monthly basis and the first certification report has been issued.
This follows news earlier today that shares of SVB Financial Group, the parent company of Silicon Valley Bank, plunged more than 60% on Thursday and fell nearly 20% further after the bell. Silicon Valley venture capital godfather Peter Thiel's Founders Fund advised clients to pull their money from the bank. In addition, there are reports that some of Silicon Valley Bank's websites are down and dozens of venture capitalists are recommending pulling assets from it.
Analysis revealed the problem of Silicon Valley Bank has nothing to do with Crypto-related businesses, but more due to the fall in value of long term government bonds held by the bank.
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