The stablecoin issuer Circle, affected by the recent closures of crypto-friendly SVB and Signature Bank, has found a new banking partner recognised for its services to Visa and Coinbase
Cross River Bank will become the new banking partner for Circle after SVB collapse. Image: pixabay
Circle, the stablecoin issuer behind USD Coin, has revealed that it has partnered with Cross River Bank — trusted banking institution that provides services to fintech and crypto firms like Visa and Coinbase — to power producing and redeeming of USDC.
The firm was forced to immediately look for a new banking partner, as Silicon Valley Bank (SVB) announced a sale of assets and stocks to raise additional capital, which ultimately only sped up the institution’s collapse. Circle disclosed it had a $3.3 billion deposit in SVB.
Other banks got caught in the wake of the liquidity crunch, seeking additional borrowing capacities like First Republic, or even being shut down by regulators to avoid contagion, as in the case of Signature Bank. US Fed was even forced to urgently introduce a $25 billion Bank Term Funding Program (BTFP) in order to help banks with possible liquidity issues.
The new commercial banking partner will help Circle to maintain USDC operations, including the new automated settlement. Besides, the stablecoin issuer has expanded its existing relationships with other banking partners, including Bank of New York Mellon (BNY Mellon), to assist with USDC redemption.
Addressing the situation with its SVB deposits, Circle assured the investors that 100% of USDC reserves are safe and secure. The company assured it would complete the transfer of the SVB cash to BNY Mellon to continue operations as usual.
Unlike popular belief, Circle also claimed it had no exposure to Silvergate, the first major crypto-friendly bank that collapsed in the series of post-FTX bankruptcies.
