Summary: The article explains the USDC stablecoin depegging from $1 over the weekend due to issues at Silicon Valley Bank, where Circle holds some USDC reserves.
What happened to USDC:
- USDC depegged from $1, dipping as low as $0.88, due to issues at Silicon Valley Bank.
- Circle has $3.3B in reserves at SVB, so its failure puts that money at risk.
What happened at Silicon Valley Bank:
- SVB was shut down due to a bank run amid concerns over its health.
- As a major crypto bank, its failure impacts the crypto industry.
Impact on USDC:
- Only 8% of USDC reserves were held at SVB, so impact is limited.
- Depegging was exacerbated by exchanges halting USDC trading.
What happens now:
- SVB depositors get access to insured deposits by Monday.
- Extent of Circle's financial hit depends on how much money is recovered.
- Remains to be seen if USDC fully repegs back to $1.