Circle, the issuer of the stablecoin USDC, will use corporate funds and "external capital" to back the asset if it does not recover some of the stablecoin reserves held in Silicon Valley Bank accounts in a timely and complete manner.
The California Department of Innovation and Financial Security shut down Silicon Valley Bank (SVB) last Friday, March 10, and appointed the FDIC as receiver.
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The decision was reportedly made due to "insufficient liquidity and insolvency." The regulator has noted the credit institution's depositors "will have full access to their insured deposits no later than Monday morning, March 13, 2023."
Circle, along with cryptocurrency exchange Coinbase, is part of the Centre Consortium, which is the issuer of USDC. On March 11, the company announced it was holding part of the asset-backed collateral ($3.3 billion) at SVB.
In this context, the stablecoin lost parity against the US dollar. According to CoinGecko, its price reached an all-time low near $0.88. However, it currently stands at $0.98, according to CoinMarketCap.
Circle later stated the issuance and redemption of USDC is "limited to business hours" by US banks.