Reflections on Post-SVB Market Dynamics

1/ We are getting lots of color and perspective from the market, and wanted share some of what I am seeing. There seems to be a large-scale risk-off from USD that is exposed to US banks and US regulatory risk. 2/ Deep market anxiety about general exposure to the US financial system, given aggressive regulatory actions on crypto and the risk of a large scale US banking system failure.

Update thread on USDC

We were heartened to see the US government and financial regulators take crucial steps to mitigate risks extending from the fractional banking system.

100% of deposits from SVB are secure and will be available at banking open tomorrow. 100% of USDC reserves are also safe and secure, and we will complete our transfer for remaining SVB cash to BNY Mellon.

As previously shared, liquidity operations for USDC will resume at banking open tomorrow morning.

Sharing an Update on USDC and Silicon Valley Bank. circle.com/blog/an-update… Tl;Dr: While USDC can be used 24/7/365 on chain, issuance and redemption is constrained by the working hours of the U.S. banking system.

USDC liquidity operations will resume as normal when banks open on Monday morning in the United States. As a practical matter, our teams are… twitter.com/i/web/status/1…

1/ Some big @circle news. This morning, we announced the termination of our proposed deSPAC transaction. While disappointing that we did not complete SEC qualification in time, we remain focused on building a long-term public company. circle.com/en/pressroom/c… 2/ From my perspective, I believe that the SEC has been rigorous and thorough in understanding our business and many novel aspects of this industry. This kind of review is necessary to ultimately provide trust, transparency and accountability for major companies in crypto.

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1/ Lots of FUD accruing out there, so another thread to help dispel the noise. 2/ Circle has no material exposure to FTX and Alameda. FTX has been a customer of Circle Payment APIs for the past 18 months, providing card and ACH services for customer transactions. Circle's crypto payments beta product uses FTX and other exchanges, for BTC/ETH liquidity.

1/ Some initial reflections on the FTX and Binance situation, and what impact we think this has on Circle, USDC and crypto more generally. These are fresh thoughts and will evolve. First, seeing a major industry peer and their loyal customer base impacted like this is god awful. 2/ This entire market cycle (down), has given us many opportunities to reflect on deep issues in the market. Lack of transparency, lack of counter-party visibility, and project treasuries and balance sheets anchored in speculative tokens are root causes.

Sharing some perspective on Binance forced conversion of USDC. Lots of misleading headlines and interpretations. Binance is not ending support for USDC, and change will likely lead to more USDC flowing to Binance. Here’s why. 1/ First, in terms of an exchange unilaterally converting existing customer assets, probably wouldn’t fly for a regulated market in the US, and certainly not how I would have handled. Not your keys…BUT 2/

1/ Yesterday, US Treasury designated for sanctions ETH addresses associated with Tornado Cash. As a US regulated FI subject to Bank Secrecy Act (BSA) requirements, Circle, together with our partner @coinbase, restricted the movement of USDC funds in these sanctioned addresses. 2/ It is likely that nearly all responsible registered Virtual Asset Service Providers also took steps to block customers from transacting with these addresses, or face charges of willfully avoiding US sanctions compliance obligations, which can bring up to 30 years in prison.

1/ With so many firms facing fundamental challenges and risks, Circle has amped up our own information about Circle and USDC. Sharing it here so it's fresh for people to review. We started publishing these in the days following the Terra collapse. circle.com/blog/how-to-be… 2/ For Developers: circle.com/blog/why-devel…

1/ CIRCLE LAUNCHES EURO COIN: Today, we announced our 2nd major fiat-backed stablecoin, Euro Coin, which went live on Ethereum mainnet, and will be available to mint and redeem on June 30th. circle.com/en/euro-coin 2/ Euro Coin, listed as EUROC, already has broad industry support including Exchanges: @BinanceUS @Bitstamp @FTX_Official @HuobiGlobal; DeFi: @CompoundFinance @CurveFinance @DFXFinance @Uniswap; Custodians: @Anchorage @CYBAVO @FireblocksHQ; Wallets: @Ledger @MMInstitutional

1/ Circle is launching our first annual crypto platform and ecosystem conference, Converge22, being held in San Francisco Sept 27-30. 3000+ people will converge around the major platforms driving crypto today. converge.circle.com/event/4ea0d06f… 2/ We are at a critical moment in the transition of crypto from early adopter to mainstream applications, touching every facet of society and the economy -- builders, startups, TradFi players, policymakers, media and more will converge.

We are ramping up our efforts around trust and transparency with USDC, so stay tuned for more, but getting started here's a new blog post from @circlepay CFO Jeremy Fox-Geen, as well as a thread below breaking it down: circle.com/blog/how-to-be… 1/ USDC is fully backed - USDC has always been backed by the equivalent value of U.S. dollar denominated assets; USDC reserves are kept in the custody of leading U.S. financial institutions, including BlackRock and Bank of New York Mellon

1/ MAJOR NEWS today for mainstream adoption of USDC, with @stripe announcing crypto payouts with USDC, launching with @twitter as the first pilot customer. It’s rewarding to see some of the most important internet companies in the world using Circle.
stripe.com/blog/expanding… 2/ A long held promise of digital currency like USDC has been removing friction and enabling anyone, anywhere to easily receive payments. Twitter creators exist everywhere the internet exists, and existing payment systems are expensive and complex to reach people easily.

1/ NEWS: Circle today announced a new $400M funding round and new strategic partnership with BlackRock focused on USDC. This is a huge milestone on the road towards mainstream adoption of digital currency. More below (link and thread). circle.com/en/pressroom/c… 2/ The funding round included a strategic corporate investment from BlackRock Inc., as well as major investments from Fidelity, Marshall Wace and Fin Capital. The $400M comes on the heels of our reSPAC announced just weeks ago.

White House Exec Order and U.S. Government Strategy for Digital Assets -- a thread with thoughts; TLDR = this is a watershed moment for crypto, digital assets, and Web 3, akin to the 1996/1997 whole of government wakeup to the commercial internet. (1/7) The U.S. seems to be taking on the reality that digital assets represent one of the most significant technologies and infrastructures for the 21st century; it's rewarding to see this from the WH after so many of us have been making the case for 9+ years. (2/7)

1/ Today, we are running full-page ads in print and homepage takeover ads in the @WSJ, @FT, @washingtonpost, @axios, @politico and @thehill. We are making the case for "How the U.S. Can Win the Digital Currency Space Race"? circle.com/digitaldollars 2/ For those who prefer to watch/listen to the argument, we also dropped a video podcast:

50 BILLION USDC (w/ thread below) 2/ While 50B USDC is a big number, it's the massive growth and ecosystem around it that tells the broader story. USDC by the numbers...

1/6 Just wrapped up 5+ hours of testimony with Congress. A few quick reflections. First, huge thanks to @RepMaxineWaters and @PatrickMcHenry and the @FSCDems for a highly engaged, full member participation hearing! Huge accomplishment. 2/6 Some of the quick reads I've seen from media coverage does not reflect I think what we all felt from the conversations. Crypto, stablecoins, and markets are not partisan issues.

1/4 Today, Circle announced a strategic investment into JYP Coin (JPYC), a Japan-based crypto finance startup building on the model of USDC for the Yen. coindesk.com/business/2021/… 2/4 As we witness the increasing utility of reserve and trade currencies on-chain, we are excited to support the growth of new currencies that leverage the open source innovation behind USDC.

1/5 Today we announced our effort to establish Singapore as Circle's Asia Hub, including working with the @MAS_sg and the leadership of @sopnendu on a Lighthouse Project for USDC and proving the potential of mainstream stablecoin adoption in Singapore. circle.com/blog/circle-to… 2/5 The Singapore government has been so forward looking on fintech and crypto, and is clearly setting itself up to be a leading market for the future of the global financial system.

White House publishes PWG Report on Stablecoins. A lot to unpack, but here’s a quick download. home.treasury.gov/system/files/1… 1/22 First, we are fully supportive of the call for Congress to act and establish Federal banking supervision for stablecoin issuance. The rapid scaling and strategic importance of this to dollar competitiveness in the age of crypto and blockchains is critical. 2/22