Major crypto coins stabilise after U.S. intervenes on SVB collapse

LONDON: Major cryptocurrencies stabilised on Monday after U.S. authorities announced plans to limit the fallout from the collapse of Silicon Valley Bank (SVB) and the issuer of the USD Coin stablecoin said it remained redeemable with the dollar.

U.S. authorities launched emergency measures on Sunday to shore up confidence in the banking system after the failure of SVB (SIVB.O) threatened to trigger a broader financial, and said SVB customers would have access to their deposits from Monday.

USD Coin, also known as USDC , recovered to $0.998, up from a record low of $0.87 hit on Saturday, far below its intended peg of 1:1 against the dollar. The fall was sparked by concerns on the exposure of Circle — the U.S. firm that issues USDC — to SVB.

Top cryptocurrency bitcoin , meanwhile, gained 6% to $23,350, a recovery of over 13% from its lows hit a day earlier.

Jeremy Allaire, CEO of USDC issuer Circle, said in a tweet on Sunday that the company’s $3.3 billion USDC reserves deposit – about 8% of its total – held at SVB would be fully available when U.S. banks open on Monday.

“Circle’s USDC operations will open for business, including with new automated settlement via our new partnership with Cross River Bank,” Allaire said.

New Jersey-based Cross River did not immediately respond to a request for comment.

Read more: Cryptocurrency chaos: Silicon Valley Bank collapse triggers USDC crash

Stablecoins such as USDC, the second-largest by market size, are a crucial cog in the world of crypto trading. They are designed to keep a steady value, and are typically backed by reserves of traditional assets such as dollars, bonds or gold.

Stocks exposed to crypto also rallied.

Crypto miners Riot Blockchain (RIOT.O) and Marathon Digital (MARA.O) both gained over 11%, while U.S. crypto exchange Coinbase Global (COIN.O) added 6.3%.

Analysts, warned that market sentiment would remain skittish despite the U.S. measures.

“Markets remain unsettled from the SVB failure,” said Alvin Tan, head of FX strategy at RBC Capital Markets in Singapore. “The situation is evolving, but volatility looks set to remain elevated in coming days.”