SVB Collapse
Billions Worth of Crypto Trades at Risk as Bank Shutdowns Take Toll
- Demise of Silvergate’s SEN, USDC depeg cloud industry
- Costs of moving between fiat and crypto could jump 40%
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The digital-asset market is coming off of a turbulent year featuring a number of high-profile blowups. Now, three shutdowns in the banking industry — SVB Financial Group’s Silicon Valley Bank, Silvergate Capital Corp. and Signature Bank — have set off a fresh set of stresses.
SVB’s failure triggered a knock-on effect in the crucial market for stablecoins after digital-asset giant Circle Internet Financial Corp., one of the biggest issuers of the widely used tokens known for their perceived safety, revealed it had $3.3 billion of reserves with the bank. The news caused Circle’s token, USD Coin, to slip below its intended 1-for-1 peg with the dollar, sending a shock through the market.