Coinbase Suspends USDC Conversions After Depeg

A serious ripple effect has begun following the recent collapse of Silicon Valley Bank, causing USDC to depeg from the US Dollar with the price quickly dropping by 10%, reaching as low as $0.90. 

Coinbase put out a tweet following the collapse that they are suspending all conversions of USDC into USD to protect themselves from any potential bank runs. 

We are temporarily pausing USDC:USD conversions over the weekend while banks are closed. During periods of heightened activity, conversions rely on USD transfers from the banks that clear during normal banking hours. When banks open on Monday, we plan to re-commence conversions.

— Coinbase (@coinbase) March 11, 2023

Circle, the company behind USDC, has also put out a statement explaining that they had a balance of $3.3 billion held at SVB. However, many are unsure about the current situation caused by SVB’s fall which has lost nearly $200 billion. 

1/ Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB.

— Circle (@circle) March 11, 2023