Circle's exposure to U.S. banks could top $9B
USD Coin (USDC) issuer Circle exposure to the United States banking system sits near to $9 billion, according to its latest audit report from January. Circle's reserves are held in a number of regulated financial institutions in the country, including Silvergate, Silicon Valley Bank, and Bank of New York (BNY) Mellon.
According to the report, the amount held in cash by U.S. regulated financial institutions was at $8.6 billion as of January 31, meaning roughly 20% of its reserves. Another $33.6 billion of Circle's reserves are held in U.S Treasuries managed by BlackRock through the Circle Reserve Fund, registered as a government money market fund and with funds held by BNY Mellon.
It's unclear how much of Circle's cash reserves were held by Silicon Valley Bank (SVB). Other banks holding the company's reserves are Citizens Trust Bank, Customers Bank, New York Community Bank, a division of Flagstar Bank, and Signature Bank. USDC is the second-largest stablecoin with a $42 billion circulation supply as of January 31.
Circle's January report was reviewed and certified by big four accounting firm Deloitte. Cointelegraph did not immediately receive a response from Circle prior to publication.
SVB is one of the biggest lenders in the United States and a major player for venture-backed companies. The bank was shut down on March 10 by the California Department of Financial Protection and Innovation, fueling fears about its future. The Federal Deposit Insurance Corporation (FDIC) was appointed as the receiver to protect insured deposits.
Dave Weisberger, CEO and co-founder of algorithmic-trading platform CoinRoutes, told Cointelegraph that the "fodder for a broader contagion event is there", and "the spark could be materializing,"
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