Circle, the issuer of the USDC stablecoin, has pledged to cover any shortfall caused by the collapse of Silicon Valley Bank.

In a blog post, Circle stated that it is legally obligated to stand behind USDC and will utilize corporate resources and external capital if necessary to ensure that the stablecoin can be redeemed at a 1:1 ratio with the US dollar. CEO Jeremy Allaire reaffirmed this commitment on Twitter.

Following a bank run on Silicon Valley Bank and the revelation that $3.3 billion in USDC’s cash reserves were held by the bank that the FDIC had taken over, USDC lost its peg to the US dollar on Friday.

The stablecoin’s value fell to $0.87, its lowest point since 2019, before recovering to trade at $0.95 as of the time of writing.

According to Circle, USDC is presently collateralized 77% ($32.4B) with US Treasury Bills that mature in three months or less, while 23% ($9.7B) is in cash held at various institutions, with Silicon Valley Bank representing just one of these institutions.

Circle has deposited $5.4 billion with BNY Mellon to reduce bank risk, and Consumer Bank holds an additional $1 billion in USDC reserves. Circle also maintains transaction and settlement accounts for USDC with Signature Bank.

Overall, Circle’s pledge to cover any shortfall caused by the collapse of Silicon Valley Bank appears to have helped reassure investors and stabilize USDC’s value after its recent dip.