SVB, which was founded in the 1980s, claimed that "nearly half" of US technology and life science startups banked with them for a wide range of services, but mainly to park cash handed to them by their venture capitalist backers to operate.
According to the management consultancy firm, enterprises are expected to continue to invest in cloud services, with the market expected to grow to $450 billion by 2025 from about $250 billion now.
It appeared to be the first of many likely lawsuits over the demise of Silicon Valley Bank, which US regulators seized on March 10 following a surge of deposit withdrawals.
According to reports, at least 40 YC-backed Indian startups have $2,50,000 to $1 million in deposits with SVB while more than 20 of them have deposits of more than $1 million.
Circle said it did not have any Stablecoin USD Coin (USDC) cash reserves at Signature Bank and that the token remained redeemable at 1:1 US dollar peg.
Yale School of Management finance professor Gary Gorton and Federal Reserve attorney Jeffery Zhang have highlighted this regulatory vacuum, and how it prevents stablecoins from becoming what they refer to as “no-questions-asked” money.
Indian startups have been adversely affected by these developments, with a particular impact on those in the software-as-a-service (SaaS) industry.