Circle built the digital dollar that played by the rules: American, licensed, checked every month. On 10 March 2023, one of its banks failed and USDC fell to about 87 cents, while Tether, which had no money at that bank, traded slightly above a dollar.
So what did playing by the rules actually buy Circle? Not protection that weekend, and not much of the interest its own reserves earn, because Coinbase holds the customers.
Part 3 of THE STABLECOIN WARS.
NUMBERS & SOURCES
• $3.3bn of USDC reserves at Silicon Valley Bank — Circle disclosure, 10 Mar 2023; Circle Form 10-K FY2025.