US Bank Crisis Prompts Stablecoin Backer’s Flight to Big Lenders

The crisis roiling smaller and regional US banks has upended plans by the second-biggest stablecoin’s issuer to park money with so-called community lenders — for now at least.

Circle Internet Financial Ltd. plans to keep all of the cash used to back its $38 billion stablecoin USD Coin at major global banks, after the closure of Silicon Valley Bank last week temporarily cut off its access to $3.3 billion of deposits. That, in turn, sparked a run on USDC that caused the token to slump from its intended dollar peg for roughly three days.

“We’re going to need to depend ...