In the wake of the USDC depeg event, Austin, Texas-based blockchain financial service Reaper Financial, which focuses on acquiring and burning digital assets, has announced that it is converting the USDC in its Permanent DRIP Fund to XRP.
"Due to a potential de-pegging event, the USDC in the Permanent DRIP Fund has been converted to XRP until stability returns. We will update as the situation evolves," the Ripple lawsuit participant stated in a tweet.
USDC issuer Circle recently confirmed in a tweet that $3.3 billion of its total $40 billion in USDC reserves are domiciled with the embattled Silicon Valley Bank (SVB). The Bank is also one of six banking partners that Circle uses to manage over 25% of its USDC reserves held in cash.
As a result, the USDC stablecoin has lost its dollar peg as investors make redemptions. Over the past 24 hours, investors have reportedly cashed out USDC worth close to $8 billion from centralized exchanges, according to reports.
At the time of writing, USDC was still below its dollar peg at $0.918. At press time, stablecoins DAI, USDD and FRAX were trading below their dollar peg. According to Nansen, Circle has burned $2.34 billion USDC in the last 24 hours. About 70%, or $1.65 billion, was burned in the last eight hours, it says.
Exchanges have also taken action in the wake of the recent event. Binance has suspended the auto conversions from USDC to BUSD due to the current market conditions. The cryptocurrency exchange Coinbase has decided to suspend USDC:USD conversions over the weekend.
Ripple CTO David Schwartz says the company was going to issue an official statement in response to questions over whether it had exposure to the embattled SVB.