Circle Clears “Substantially All” USDC Redemption Backlog

Stablecoin issuer Circle claims to have cleared “substantially all” backlog requests for minting and redemption of the USD Coin (USDC) stablecoin, the company said in an operational update on 15 March.

According to the announcement, despite the events of last week — which impacted the liquidity operations for USDC — Circle was still able to redeem $3.8 billion and minted $0.8 billion USDC between Monday morning and the close if banking business in the U.S. on 15 March. With this, the stablecoin issuer has now cleared almost cleated the backlog of minting and redemption requests for the stablecoin. The company wrote:

“The events of the past week have impacted the liquidity operations for USDC. Circle has worked tirelessly to re-initiate services with alternative banking partners, particularly payment and USDC redemption services. We would like to thank our customers for their patience during these unprecedented times.”

Circle’s troubles began last week after Silicon Valley Bank (SVB) was shut down by California’s financial watchdog. The next day the stablecoin issuer revealed that it could not withdraw around $3.3 billion out of its $40 billion USDC reserves from SVB, which caused a bank run and resulted in USDC losing its peg to the U.S. dollar. Circle’s situation became even worse on 13 March, when Signature Bank — which processed minting and redemption of USDC through SigNet — was also shut down by the NYDFS.

The firm worked quickly over the weekend, and on 13 March announced that Cross River Bank — which also provides services to crypto exchange Coinbase — had become its new banking partner for minting and redeeming USDC. The company also noted that it had expanded its ties with the Bank of New York Mellon (BNY Mellon), which was the primary custodian of the USDC reserves.

On 14 March the stablecoin issuer said it went live with a new banking partner for U.S. wires, and on 15 March revealed it had used the same partner for international wires “to and from 19 countries”. Circle also expects to “bring more capabilities” back online in the near future.