USDC Stablecoin Depegging Causes Concern Among Crypto Advocates, 5 Other Stablecoins Slip Below Parity
On Saturday, March 11, 2023, crypto advocates are concerned as a few stablecoin assets have depegged from their $1 parity. The second-largest stablecoin USDC, issued by Circle Financial, fell below $0.90, reaching a low of $0.877 per coin. Additionally, around five other stablecoins have dropped below the U.S. dollar parity during the early morning (ET) trading sessions on Saturday. Major Crypto Exchanges Suspend USDC Trades as Concerns Mount
On March 11, 2023, stablecoin assets are having a rough day after Circle Financial announced that $3.3 billion of the cash backing usd coin (USDC) was held at Silicon Valley Bank (SVB). This news has caused USDC to depeg from the U.S. dollar, dropping to a low of $0.877 per coin on Saturday. As of 7:45 a.m. ET, USDC is currently trading at $0.91 per unit, up 3% from the low of $0.87. We are temporarily pausing purchases using USDC on Ethereum and Polygon. We have also paused loads to the BitPay Card in the app. Further updates will follow here.
— BitPay (@BitPay) March 11, 2023
Following the depegging of USDC, several major crypto exchanges, including Binance and Coinbase, have suspended USDC trades. “Binance has temporarily suspended auto-conversion of USDC to BUSD due to current market conditions, specifically related to high inflows & the increasing burden to support the conversion,” Binance tweeted. “This is a normal risk-management procedural step to take while we monitor the situation.”
Coinbase stated: “We are temporarily pausing USDC:USD conversions over the weekend while banks are closed. During periods of heightened activity, conversions rely on USD transfers from the banks that clear during normal banking hours. When banks open on Monday, we plan to re-commence conversions.” The crypto payment processor Bitpay has also paused USDC payments and debit card loads.
The Singapore-based crypto exchange Crypto.com also suspended USDC deposits on March 11. “Out of an abundance of caution, we have temporarily suspended USDC to USD conversion, USDC deposit, and USDC pair trading due to current market conditions. USDC withdrawal remains available,” the company said on Saturday. “We will continue to evaluate the situation and plan to resume USDC trading as soon as possible.”
The depegging of USDC has caused a ripple effect of depegging issues for five different stablecoin projects, including GUSD, DAI, FRAX, USDP, and USDD. FRAX is currently trading for $0.91, USDD is swapping for $0.94, USDP is trading for $0.95, DAI is changing hands for $0.92, and GUSD is trading for $0.97 per unit. The largest stablecoin by market capitalization, tether (USDT), has remained within the $0.99 to $1 range since the SVB issues began. Tags in this story Banking, Binance, BitPay, Blockchain, Cash, Circle, Circle Financial, Circle USDC, Coinbase, Crypto, Crypto.com, Crypto.com USDC, Crypto.com USDC suspension, Cryptocurrency, DAI, Decentralized, depegging, Digital Assets, Exchanges, Finance, Fintech, FRAX, GUSD, Investors, Liquidity, Market Capitalization, market volatility, Regulation, risk management, Silicon Valley Bank, Stablecoin, SVB, SVB deposits, Tether, trading, USD parity, USDC, USDC Depeg, USDC depegging, USDD, USDP
What are your thoughts on the challenges facing stablecoins today? Share your views on this topic in the comments section below. Jamie Redman
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today. Bank of England Shuts Down Silicon Valley Bank"s UK Branch After US Regulators Close Parent Company NEWS | 1 hour ago ‘Fiat Is Fragile’ — Silicon Valley Bank"s Collapse Sparks Finger-Pointing and Concerns of Contagion NEWS | 3 hours ago
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