Recently a fintech company, Circle has made announcements about its partnership with Cross River Bank.
The purpose of this partnership is to assist Circle in redeeming and producing the cryptocurrency known as USD Coin (USDC).
Circle Expands Its Relationships
Almost $3 billion of funds were stuck in Silicon Valley Bank. However, with this new alliance with Cross River Bank, these funds will finally be available to investors.
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Additionally Circle has extended its relationship to other banks as well, which includes the Bank of New York Mellon. This bank is also currently offering custody services for reserves of Circle.
Earlier, Circle had also confirmed that all of the USDC reserves were protected and safe.
According to the fintech, the remaining cash in Silicon Valley Bank would also be transferred to Bank of New York Mellon. It also said that the availability of funds for the USDC would continue this week.
Fintech also stated that it has no affiliation with Silvergate which is another bank for cryptocurrency.
Silvergate had also recently announced that it would liquidate its assets in compliance with the acquisition by the government regulators.
USDC Breaks Its Peg to US Dollar
The USDC recently fell below the rate of $0.90 against the dollar, thereby breaking its peg to the greenback.
However, it recovered over the next few days and is currently valued at $0.99, thus restoring confidence in the digital currency.
The USDC Turmoil
With the collapse of the Silicon Valley Bank, a financial calamity broke into the world of digital currency. It was this calamity in the financial world that lead to the turmoil of the USDC.
The US bank is one of the largest countries and offers its services to the tech world and venture capital enterprises.
It has a big name in the technology and innovation sector where it provides leading financial services.
Given Silicon’s control in the market, its failure triggered fear amongst many enterprises and Circle is one of them.
The Federal Reserve and other government departments reassured the markets by declaring that the depositors at Silicon would be fully covered.
USD Coin as a Stablecoin
The USDC is a cryptocurrency that is pegged to the US dollar and its main feature is that its value remains stable.
The value of a stablecoin is usually secured against a commodity like gold or fiat currency such as the Dollar, Pound, or Euro.
The main purpose behind a stablecoin is to prevent rapid fluctuations like that of a cryptocurrency such as Bitcoin. The value of cryptocurrency changes every day and the fluctuations are significant.
Stablecoins serve a variety of purposes, they can be used as a store of value, a medium of exchange, or even as a unit of account.
How Does Circle Operate
Interestingly, Circle also has to its credit the creation of USDC stablecoin, providing a stable rate for its users.
In the world of crypto and blockchain, Circle has quite the name for providing services connected to blockchain technology and digital assets.
The inception of the fintech company dates back to 2013, with it offering a variety of services.
Circle also has a digital app that goes by the name Circle Pay app, allowing customers to send and accept digital currency instantly.
The best part about the app is that it has no charges for doing so. Similar to this is another app under Circle, which goes by the name Circle Invest app.
With this app, investors can make investments in digital assets like Ethereum, Bitcoin, and other cryptocurrencies.
The fintech company is known for giving its services to companies like Circle APIs, allowing companies to integrate virtual payments into their applications.
The goal of Circle is to make a global financial system that is more efficient, open, and transparent.
What Does The Future Hold?
Circle’s expanded relationship with reputable banks will bring stability and reliability, thus increasing customer confidence in the USDC.
The partnership with Cross River Bank will increase USDC’s accessibility in the crypto market.
Overall Circle’s latest association will offer liquidity, regulatory compliance, stability, and accessibility of stablecoins.