Circle, a leading global crypto finance company, has announced that it has partnered with Cross River Bank for producing and redeeming USD Coin (USDC), its flagship stablecoin pegged to the US dollar. Cross River Bank is a recognized leader in providing banking services to fintech and crypto firms, including Visa and Coinbase. In addition to Cross River Bank, Circle has also expanded relationships with other banking partners to assist with USDC redemption, including Bank of New York Mellon (BNY Mellon), which already provides custody services for Circle’s reserves.
The announcement comes after a harrowing weekend that saw Circle’s flagship USDC stablecoin break its peg to the dollar, falling below $0.90 early on Saturday. However, a series of moves by banks and regulators restored confidence in the token, and at the time of publication, USDC has recovered and trades at $0.99.
During the weekend, Circle issued a press release confirming that 100% of USDC reserves are safe and secure. The company also announced that it would complete the transfer of the remaining Silicon Valley Bank (SVB) cash to BNY Mellon, and liquidity operations for USDC will resume at banking open on Monday.
Circle’s announcement also noted that it had no exposure to Silvergate, the crypto-friendly bank that announced it would voluntarily liquidate its holdings as part of a takeover process by federal regulators. This weekend’s USDC turmoil was part of a broader financial catastrophe that started due to the collapse of SVB, the 16th-largest bank in the United States and a financial pillar of the tech and venture capital world. The failure of SVB triggered a panic as thousands of companies, including Circle, could not access billions in deposits. However, the Federal Reserve and other agencies calmed markets by announcing that depositors at SBV would be made whole.
Circle’s partnership with Cross River Bank and other banking partners is a significant step towards strengthening the stability and reliability of USDC, especially in the wake of recent events. Cross River Bank has a reputation for providing banking services to fintech and crypto firms and has been recognized for its services to Visa and Coinbase. BNY Mellon, on the other hand, already provides custody services for Circle’s reserves, making it a natural fit for assisting with USDC redemption.
Overall, Circle’s partnership with Cross River Bank and other banking partners underscores the importance of reliable banking partnerships for the stablecoin industry, which is still in its nascent stages. As the industry grows and matures, more partnerships like these are likely to emerge, providing greater stability and reliability for stablecoins like USDC.