Monday, March 13th, 2023, HarianKripto.id - The US Government's steps to address fractional banking risks have given hope to the financial industry.
This system occurs when banks lend out a portion of the deposits they receive and only keep a small portion of the total amount as a reserve, which can create instability in the financial system.
However, the US government and financial regulators have taken actions such as increasing reserve requirements and supervision to reduce risk. In addition, all deposits from SVB are safe and accessible at the bank's opening tomorrow, providing relief to customers who may be concerned about the security of their deposits.
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The risk involved relates to the USDC crypto stablecoin. USDC issuer Circle has completed the transfer of funds from Silicon Valley Bank (SVB) to BNY Mellon, which is the custodian bank holding reserve funds for USDC.
Circle verifies that 100% of the reserve funds supporting USDC are safe and secure. This refers to the fact that USDC is designed to be backed 1:1 by the US dollar held as a reserve, thus maintaining a stable value for the cryptocurrency.
USDC liquidity operations will resume at the opening of banks on Monday in the United States, indicating that trading or other transactions involving USDC may have been temporarily suspended or restricted due to interbank fund transfers.
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According to the statement by Circle CEO Jeremy Allaire, "We will be bringing on a new transaction banking partner with automated minting and redemption potentially as soon as tomorrow."
Circle is also committed to building strong and automated USDC settlement and reserve operations with the best quality and transparency.
USDC Price Has Been Recovering
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Along with the announcement from Circle CEO, Jeremy Allaire, regarding the USDC reserves conducted by Circle and assisted by the US government, USDC has been recovering.
According to data from CoinMarketCap, the price of USDC has stabilized at $1.00 when this article was released. The stability of USDC's price is followed by an increase or "big pump" in the price of other cryptocurrencies.
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