Coinbase once provided Circle with a $3.3 billion instant credit line tied to USDC
Fortune magazine cited sources familiar with the matter, stating that when the stablecoin issuer Circle faced a $3 billion stranded situation due to the collapse of Silicon Valley Bank SVB, Coinbase provided Circle with an immediate $3 billion credit line.
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Coinbase Provides $3.3 Billion Instant Loan
The purpose of this instant loan was to provide funds in case the Silicon Valley Bank was not able to support user withdrawals by March 12th after being taken over by the FDIC Federal Deposit Insurance Corporation in early March.
However, this loan was not needed as the $3.3 billion held by Circle in the Silicon Valley Bank was transferred to the Bank of New York Mellon after the government agency took over the Silicon Valley Bank.
Timeline of the Silicon Valley Bank incident:
March 8th: Announced the sale of shares to seek financing of $22.5 billion due to $18 billion losses from the sale of long-term bonds
March 10th: Silicon Valley Bank's stock fell 70% in pre-market trading and trading was suspended
March 11th: California regulators issued an emergency announcement, closed Silicon Valley Bank, and placed it under FDIC control
March 11th: Circle confirmed $3.3 billion held in the Silicon Valley Bank, awaiting FDIC assistance
March 11th: Silicon Valley Bank initiated an auction process
March 13th: The U.S. Treasury, Federal Reserve, and FDIC issued a joint statement to support full user withdrawals
March 14th: All deposits were transferred to the transitional bank Bridge Bank, and services resumed
March 17th: Silicon Valley Bank filed for Chapter 11 bankruptcy for corporate restructuring
Coinbase Advocates for USDC Adoption
In December last year, Coinbase also urged users to exchange USDT for USDC and waived the fees for converting USDT to USDC.
During this incident, on March 11th, USDC briefly dropped to $0.88 and gradually recovered to around $1, but this has affected its market value and circulation, decreasing from $43.5 billion on March 11th to $35.3 billion.