On Friday night, the world’s top cryptocurrency exchanges, Binance and Coinbase, announced that they would temporarily suspend USDC conversions.
This comes amid concerns that Circle, the issuer of USDC, holds some of its cash reserves at Silicon Valley Bank, which was closed by California’s financial regulator on Friday.
Binance cited “current market conditions” and temporarily suspended the auto-conversion of USDC to BUSD while it monitors the situation.
Similarly, Coinbase, the largest cryptocurrency exchange in the US, said it would suspend USDC conversion to USD over the weekend as banks are closed, citing the need for USD transfers from the banks that clear during normal banking hours.
Circle later revealed that $3.3 billion worth of the cash backing USDC remains locked in Silicon Valley Bank, one of six banks it uses for managing 25% of USDC reserves.
The contagion from Silicon Valley Bank’s collapse has sent shockwaves across the tech industry, with several companies revealing their exposure to the California bank.
