USDC Stablecoin Strengthened by U.S. Banking Crisis in March, Circle CEO Says

AUSTIN, Texas — The USDC stablecoin has emerged from March’s banking crisis stronger and safer, Jeremy Allaire, CEO of issuer Circle Internet Financial, said Wednesday.

USD coin, a critical rail for moving money through the crypto industry, lost its dollar peg in mid-March after Silicon Valley Bank’s failure temporarily imperiled billions of dollars of Circle's cash reserves. Though it quickly recovered ground, the event spooked investors and sparked massive outflows from the second-largest stablecoin. Circle held some of its USDC reserves at Silicon Valley Bank.

“We've successfully navigated this crisis, and have actually upgraded the market infrastructure behind USDC to be by far the strongest, safest digital dollar on the internet today, hands down, there's no question,” Allaire said on stage at CoinDesk’s Consensus conference here.

He drew a contrast between USDC and other “alternatives we don't know much about.” That unspoken competitor was tether (USDT), long the stablecoin market leader despite some critics’ misgivings about its banking relationships and backing.

But the market disagreed. Since March’s banking crisis, USDC’s market cap has fallen to $29 billion from $39 billion, according to Nansen. Tether, meantime, has gained market share.

Still, Allaire said USDC needs to become safer still. He said that can happen only with legislation at the federal level.

Read full coverage of Consensus 2023 here.