USDC briefly loses its dollar peg after Circle discloses $3.3B in reserves at Silicon Valley Bank

Circle/USDC

After Silicon Valley Bank collapsed, Circle disclosed that $3.3B of USDC's roughly $40B in reserves, nearly 8%, was held at the bank. USDC, meant to trade at $1, fell below 87 cents. It showed that a fully reserved stablecoin still carries significant bank counterparty risk.

• Exposure: $3.3B at SVB out of ~$40B total USDC reserves (nearly 8%).
• Price drop: USDC fell below $0.87 on 11 March 2023, breaking dollar peg.
• Risk lesson: reserve backing alone does not eliminate bank failure risk; stablecoins depend on custodian solvency.
• Context: USDC and BUSD faced broader pressures; Tether's USDT recovered market share during the crisis.