Circle Tunes USDC Reserves After SVB Collapse

Researchers from the Federal Reserve Banks of New York and Boston analyzed how Circle restructured its USDC reserves after Silicon Valley Bank (SVB) collapsed in March 2023. The bank's failure led to a de-peg of USDC, with $3.3 billion deposited at SVB.

The Fed analysis found that the weighted average maturity (WAM) of the Circle Reserve Fund (CRF) decreased significantly, falling from above the median for money market funds to among the shortest of any Treasury-only money market fund.

Circle's reverse repurchase agreement holdings surged from zero to over 90% of net assets before settling at 69%. This involved lending cash overnight in exchange for Treasury collateral. Centrally cleared sponsored repos grew to 77% by the fourth quarter of 2025 within that repo book.