USD Coin value falls after revealing $3.3bn held at Silicon Valley Bank

Separately, a newly-formed, government-administered SVB entity, called the Deposit Insurance National Bank of Santa Clara, or DINBSC, sent a letter to an estimated 8,500 SVB employees offering 45 days of employment after which they would be let go, according to Bloomberg.

The gathering fallout followed reports that SVB did not have a chief risk officer in place in the months leading up to the collapse, while more than 90% of its more than $212bn in deposits were not insured.

For now, concerns about contagion to other areas of the financial system appeared limited to crypto-currencies early Saturday.

But SVB, based in Santa Clara, California, holds deposits of about one tenth the size of JPMorgan, the largest US bank. It abruptly collapsed after failing to raise money to meet withdrawal demand after saying it had sold about $21bn of securities from its portfolio, resulting in a $1.8bn loss for the first quarter.

Bloomberg estimated that SVB does business with almost half of all US venture capital-backed startups, and 44% of US venture-backed technology and healthcare companies that went public last year.

SVB, the Wall Street Journal noted Saturday, was burdened by using short-term money from depositors to invest in assets that could not be swiftly unloaded to meet customer withdrawals when new depositor funding dried up.

But none may be more vulnerable than the crypto-business, already reeling from a broad collapse in the value of its tokens and the bankruptcy of the crypto-exchange FTX that led to the arrest of CEO Sam Bankman-Fried on fraud charges.

Circle did not immediately respond to a request for comment about the dollar peg, sent outside of US working hours.

Used in cryptocurrency trading, they have surged in value in recent years. USDC is the second-biggest stablecoin with a market cap of $37bn . The largest, Tether, has a market cap of $72bn, according to CoinGecko.

Traders have been on guard this week for signs of contagion in the financial sector and beyond from troubles for Silicon Valley Bank and crypto-focused Silvergate (SI.N), which this week disclosed plans to wind down operations and voluntarily liquidate.

The chief executive of cryptocurrency exchange Binance said in a tweet on Friday it had no exposure to Silicon Valley Bank, as did Tether Chief Executive Paolo Ardoino.

Stablecoin issuer Paxos and crypto exchange Gemini also tweeted that they do not have relationships with the bank.

Reuters contributed to this report