:format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/Z6ROK5CLQFAHLPSJ7EWQC3NNM4.jpg)
“After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors.
Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system.”
See Also: Joint Statement by Treasury, Federal Reserve, and FDIC
See Also: Bitcoin Rises on Report Government Weighing Plan to Protect All Silicon Valley Bank Depositors
See Also: U.S. Lawmakers Met With Fed, FDIC to Discuss Collapse of Silicon Valley Bank: Source
:format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/5B572SZQW5BWRO4SUWUP5G4ZSI.jpg)
“In a statement, New York Department of Financial Services Superintendent Adrianne Harris said the Federal Depository Insurance Corporation (FDIC) had taken receivership of the bank. This marks the third bank collapse in under a week, following Silvergate Bank’s voluntary liquidation and Silicon Valley Bank’s shutdown on Wednesday and Friday, respectively.
A joint statement from the Federal Reserve, FDIC and U.S. Treasury Department said all depositors who used Signature would be made whole, in a joint statement outlining actions the federal regulators would take to protect depositors in SVB.
Signature Bank is a New York state-chartered commercial bank and is FDIC-insured, with total assets of approximately $110.36 billion and total deposits of approximately $88.59 billion as of December 31, 2022.
All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.”
Circle Scrambles to Right USDC After Signature Bank Failure
“Signature’s sudden failure leaves a key part of the crypto industry’s backend infrastructure in limbo: Signet. It’s a blockchain-based real time payments system that’s supposed to work 24/7. Circle, Coinbase and many crypto trading firms used Signet. But with the death of Signature, Signet, too, has gone kaput.
Circle CEO Jeremy Allaire acknowledged on Twitter that this meant the company could no longer mint or redeem USDC through Signature’s Signet product. Allaire said in another tweet that the company would be ‘bringing on a new transaction banking partner with automated minting and redemption potentially as soon as tomorrow.’ Circle holds no USDC reserves with Signature Bank.
The fate of Signet may prove important for Coinbase, too. In its third quarter shareholder letter, Coinbase – another key company for USDC – said it had joined Signet to allow for real-time payments and settlements.”
“Circle Internet Financial said Saturday it will “cover any shortfall” in the assets backing its stablecoin USDC in the event it does not receive the entirety of a $3.3 billion cash reserve it was holding at Silicon Valley Bank.
Circle will stand behind USDC and cover any shortfall using corporate resources, involving external capital if necessary.
Circle was holding $3.3 billion of USDC’s cash backing at Silicon Valley Bank when the FDIC seized the bank’s assets on Friday. The value of the stablecoin fell as low as $0.88 in last 24 hours, before rebounding to $0.97, after the announcement.
Circle said it attempted to move its assets out before SVB’s collapse and that the transaction could settle on Monday, when U.S. banks resume normal operations.”
See Also: Circle Confirms $3.3B of USDC’s Cash Reserves Stuck at Failed Silicon Valley Bank
The Disrupt 