- USDC stablecoin net outflows have surpassed $10 billion.
- Circle has substantially moved all cash to BNY Mellon.
(USDC) stablecoin outflows have exceeded $10 billion since March 10. Investors feel that Circle’s USDC stablecoin, with many of them switching to
, has reached its 22-month high in market share.
When the regulators shuttered the critical reserve banking partner, Silicon Valley Bank, the U.S. payments firm Circle weathered SVB’s collapse. The USDC re-established its dollar price peg, but the token has declined 23% from its one-time market capitalization of $43 billion, according to CoinMarketCap.
However, USD Coin remains the second-largest stablecoin with a $33 billion market capitalization. The Circle backs the USDC’s value with short-term government bonds administered by the investment management firm BlackRock (NYSE:
) and cash reserves at several U.S. banks. After the failure of the banking system, the Circle has managed to transfer all cash to BNY Mellon, one of the world’s largest custodian banks.
The outflow surges started on March 10 as SVB collapsed, locking $3.3 billion of cash reserves in its wallets for days until the government intervened. The event threw the stablecoin market into turmoil as USDC and other smaller stablecoins temporarily lost their pegs.