Summary
- Coinbase reportedly offered a $3 billion line of credit to help Circle fix its financial problems after the collapse of Silicon Valley Bank.
- The offer was almost completed, but then USDC restored its peg against the dollar.
- The US financial watchdogs also promised to save each depositor at SVB.
Coinbase Offered a $3 Billion Credit to Circle
Coinbase, one of the most popular cryptocurrency exchanges in the US, offered a line of credit worth $3 billion to Circle to help it fix its financial cracks after the collapse of Silicon Valley Bank (SVB). The stablecoin-issuer revealed a whopping $3.3 billion exposure to SVB, which negatively affected the price of USDC and caused it to plunge way below its $1 target.
Almost Completed Deal Reverted
According to reports, Coinbase and Circle were close to completing the deal but reverted once USDC restored its peg against the greenback. This happened after Circle issued a reassuring statement, vowing to cover any investor losses due to the SVB crisis. In addition, the leading financial watchdogs in the USA promised to save each depositor at SVB regardless of their exposure amount.
US Financial Watchdogs Promise Support
The US financial watchdogs promised that they would save each depositor at SVB even those with exposure higher than $250,000. Thus investors were reassured that their deposits would be safe and secure despite any potential difficulties with Silicon Valley Bank’s liquidation process.