Circle Financial, the issuer of the stablecoin USDC, is partnering with Cross River Bank after its former settlement partner, Signature Bank, was closed by New York regulators, according to a statement from CEO Jeremy Allaire. “The 1:1 redeemability of all USDC in circulation is of paramount importance to Circle,” Allaire emphasized.
Crypto Firms Scramble for New Banking Partners in the United States
Circle Financial has announced a new banking partner following the depegging of its stablecoin, usd coin (USDC), from the U.S. dollar over the weekend. CEO Jeremy Allaire said in a statement on Sunday evening that more than $3 billion in funds that were previously stuck in Silicon Valley Bank (SVB) would now be accessible thanks to the federal bailout announced by the U.S. central bank and Treasury. USDC regained parity with the U.S. dollar, or came very close to it, roughly 45 minutes after the U.S. Federal Reserve announced that all depositors from SVB and Signature Bank would be made whole.
Circle CEO Jeremy Allaire’s announcement said that the company is working with a new banking partner and that Circle’s USDC operations will open for business on Monday morning, with new automated settlement via Cross River Bank. Despite the closures of Silvergate Bank, Silicon Valley Bank (SVB), and Signature Bank, some U.S. crypto businesses still have banking partners, according to Larry Cermak, head of research and data at The Block. He noted that there are only a small number of so-called crypto-friendly banks available today.
Cermak listed a number of banks that are considered friendly to the crypto industry, including Customers Bank, First Foundation Bank, Sutton Bank, Evolve Bank & Trust, Bankprov, Quontic Bank, and Cross River Bank. There are rumors that Coinbase, a popular crypto exchange, is also leveraging Cross River Bank as a banking partner. However, the situation has not been smooth for everyone, as Okcoin’s U.S. exchange had to suspend U.S. dollar deposits and over-the-counter services due to issues with its former primary USD bank, Signature Bank. Okcoin President Hong Fang confirmed the suspension and explained that the exchange was working to find a new banking partner.
Okcoin has suspended U.S. dollar ACH and wire transfers, but Okcoin President Hong Fang has assured the public that “all corporate and customer funds are safe.” The scramble for new banking partners by crypto companies comes after the Federal Deposit Insurance Corporation (FDIC) transformed Signature Bank and Silicon Valley Bank (SVB) into bridge banks. On Monday morning, U.S. president Joe Biden reassured the nation that America’s “banking system is safe” and that “your deposits will be there when you need them.”
Meanwhile, reports say that trading has been halted for multiple U.S. banks when stocks opened on Monday.
What do you think the future holds for cryptocurrency companies and their banking partnerships in the ever-evolving financial landscape? Share your thoughts in the comments section below.