Circle USDC Founder Jeremy Allaire's Efforts Save Crypto From The Collapse Of Crypto-Friendly Banks

USDC Circle stablecoin founder Jeremy Allaire. (Photo; Doc. Bitrates)

JAKARTA - USDC stablecoin issuer Circle is looking to save crypto from struggling mainstream banks, according to Circle CEO Jeremy Allaire. In an interview, Allaire revealed that Circle is adjusting after the recent collapse of Silicon Valley Bank, with about $3.3 billion in funds being moved from Silicon Valley to BNY Mellon.

Allaire also questions the narrative that the mainstream banking system must be protected from digital currency, arguing that crypto requires deposits from traditional banks.

Increased scrutiny of how mainstream banks manage deposits for crypto companies comes after the collapse of several leading financial institutions, including Silicon Valley Bank, Silvergate Bank, and Signature Bank.

Even so, Circle has confirmed that USD Coin is 100 percent collateralized with cash and US Treasuries, as well as that they have a legal obligation to support USDC and can use corporate resources and external capital if needed.

Allaire also confirmed that Circle had $3.3 billion in shipments, and through the fed wire system, the recipient's bank had acknowledged that the funds came in. Circle has also updated its community regarding stablecoin operations, starting processing exchanges through new banking partners and continuing its regular operations.

Although USDC currently has a valuation of US$37 billion (Rp.568 trillion), Circle has received more than US$135 million (equivalent to Rp.2 trillion) in venture capital funding across 4 investment rounds. While USDC's value has plummeted due to Circle depositing money in the ill-fated Silicon Valley Bank, the company has promised to make up for the shortfall as part of the $3.3 billion in customer funds transferred.

Allaire said that "USDC's liquidity operations will continue as normal when banks open Monday morning in the United States. As a practical matter, our team is prepared to handle significant volumes built on the strong liquidity and reserve assets discussed below. As a regulated payment token, USDC will remain 1 to 1 exchangeable for US Dollars."