Circle CEO: $3.3 Billion stuck at SVB may be recoverable

• Circle CEO Jeremy Allaire confirmed that the firm has accessed the funds stuck at Silicon Valley Bank
• Allaire believes the $3.3 billion stuck in SVB will be fully recovered

Jeremy Allaire, the co-founder and CEO of Circle, recently appeared in an interview with Bloomberg. The executive addressed the recent turmoil in the banking industry and its impact on USD Coin. Allaire shared his thoughts on the likelihood of recovering the billions of dollars stuck at the recently-closed Silicon Valley Bank. 

Crypto needs protection from traditional banking

In the interview, the Circle executive pointed out the changing circumstances in the crypto-industry. According to Allaire, the sentiment that the traditional banking system needs to be protected from exposure to crypto-assets is no longer valid. He believes that recent developments have proved that the tables have turned and its crypto-entities that need to be protected from the failures of traditional banks. 

Speaking on the exposure to Silicon Valley Bank, Allaire revealed that Circle was able to access its funds deposited in the shuttered bank, as of 13 March 2023. The USDC issuer has a whopping $3.3 billion deposited at SVB. Those funds are part of the $40 billion reserve that backs its stablecoin. 

USDC lost its peg to the US dollar after the firm’s exposure to Silicon Valley Bank was revealed. The stablecoin was trading at as low as $0.88 in the hours following the turmoil at SVB. It has since recovered to $0.99 and is once again USD-pegged.

In fact, according to Circle’s Jeremy Allaire, “I believe that we have the safest digital dollar on the internet, and that’s really critical.”  

In a Twitter thread earlier this week, Allaire had also revealed that a majority of USDC’s cash reserves were held at Bank of New York Mellon. At the time, Circle had initiated a transaction to transfer the $3.3 billion out of SVB, 3 days before the bank was shut down.

Ergo, it is expected that the Federal Deposit Insurance Corp will honour the transfer request, allowing the funds to be deposited in a different banking institution in full.