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It's on the news just today that FDIC has taken over already and this could end that to a terrible loss because even if a person has over $10M in the bank, they will return only the insurance which is $250,000.
From what I have read was that this depeg issue was because of the unrealized loss. I got confused already with such a term. But that is exactly what I have read on some reliable sites.
IIRC, it only accounts for <3% of insured holders and the insured funds' amount could be returned up to $250,000.
A few reasons why it got depegged is because there is FUD of Circles reserve area still on Silvergate, and their withdrawal from SVB is stuck. So the market reacts by selling USDC to another token which makes the price reducing. Note that Binance and Coinbase are also pausing the USDC trade to prevent it from going down way deeper.
Since FDIC already make it way, there are two possible options that Circle could hope/relies on:
What do we expect with SVB and the FDIC?
We have reason to believe that under applicable FDIC policy, transfers initiated prior to a bank entering receivership would have otherwise been processed normally. In other words, the FDIC should allow transactions to settle in the ordinary course through the end of a banks standard daily processing cycle until the FDIC takes control of the failed institution. We understand that the FDIC is currently determining the status of transactions initiated prior to the applicable receivership cutoff times, and it is possible that the transfers initiated on Thursday will be processed on Monday.
Moreover, SVB has a strong franchise that is at the center of American entrepreneurship and technology industry growth. We are hopeful that the FDIC as receiver will seek a rapid purchase and assumption of a franchise as strong as SVB's to ensure all depositors are made whole.
However, it is also possible that SVB may not return 100% and that any return might take some time, as the FDIC issues IOUs (i.e., receivership certificates) and advanced dividends to deposit holders.
In such a case, Circle, as required by law under stored-value money transmission regulation, will stand behind USDC and cover any shortfall using corporate resources, involving external capital if necessary.