For a long time, Circle had linked itself with the Silicon Valley Bank as its banking partner. Unfortunately, the long-running partnership came to a tragic end and it was not because of either of the sides.
Instead, it was the involvement of the regulatory authorities from the United States who went after Silicon Valley Bank.
They brought an end to the banking firm, taking full control over its funds, and then releasing the funds back to the depositors.
After a couple of days of being heavily pressurized, Circle ended up getting its $3.3 billion reserves that were stuck at the SVB.
However, it had become obvious that Circle had to find itself a new banking partner. In order to deal with customers and investors based in the United States, it is important for any crypto firm to be connected with a banking firm.
This way, they can offer them the facility of making deposits and withdrawals using fiat currencies.
Circle Partners with Cross River Bank
Having no banking partner could prove to be a huge problem for Circle but it has acted fast to solve the matter very quickly.
The company has announced that they have partnered with another major banking firm to continue with its operations without any interruptions.
According to the latest reports, Circle has formed a partnership with a new banking firm known as Cross River Bank.
Their new partnership is going to be very favored by all the crypto firms that are connected with Circle.
The Cross River Bank has gained a tremendous amount of popularity and recognition among crypto and fintech firms.
They have even partnered with several major cryptocurrency firms such as Coinbase to offer them non-stop financial services.
The Cross River Bank has been working very closely with another major online payment services platform, Visa.
Circle has confirmed that Cross River Bank will be their new commercial banking partner. They will be providing depositing and withdrawal services to their users through the Cross River Bank.
The company will also work with Cross River Bank for the production of the USDC. They will do the same when the users go on to withdraw their USDC tokens in the form of USD or other fiat currencies.
Circle is Partnering with More Banking Firms
The officials at Circle announced that they are not going to remain dependent on a single banking firm. They have learned their lesson from the demise of the Silicon Valley Bank and all the chaos it created in the crypto market.
They talked about the impact the SVB’s demise, posed on their business and they want to deal with the problem for good.
Circle has revealed that their aim is to ensure that they do not face the same problem they faced a few days back. To ensure something like this does not happen again, they have decided to partner with more than one bank.
They will continue expanding their partnerships with the banking firms so things do not get out of hand if one bank gets taken down.
Their aim is to expand their relationships with the banking firms and to make it happen, they will keep partnering with more banks.
As per the Circle officials, they are already in partnership with BNY Mellon. They already have a significant amount of reserves stored at BNY Mellon.
Future of Circle
The entire Circle community was under a great level of stress due to the recent developments. It was the worst thing that they could imagine as the price of the USDC fell to a low of $0.87.
Although the USDC did recover to the 1:1 peg, it has become obvious for Circle to ensure that it has several solutions in place to deal with such problems in the future.