As of Saturday, March 11, 2023, cryptocurrency advocates are concerned that some stablecoin assets have delinked from their $1 peg. The second largest stablecoin, USDC, issued by Circle Financial, fell below $0.90, hitting a low of $0.877 per coin. Additionally, around five other stablecoins fell below the US dollar parity during early morning (ET) trading sessions on Saturday.
Major Crypto Exchanges Suspend USDC Trading as Concerns Mount
On March 11, 2023, stablecoin assets are having a rough day after Circle Financial Announced that $3.3 billion of the USD cash-backed currency (USDC) was held at Silicon Valley Bank (SVB). This news has caused the USDC to de-peg from the US dollar, falling to a low of $0.877 per coin on Saturday. As of 7:45 am ET, the USDC is currently trading at $0.91 per unit3% higher from the low of $0.87.
We are temporarily pausing purchases using USDC on Ethereum and Polygon. We have also stopped uploads to the BitPay card in the app. More updates will follow here.
—BitPay (@BitPay) March 11, 2023
Following the decoupling of USDC, several major cryptocurrency exchanges, including Binance and Coinbase, have suspended USDC trading. “Binance has temporarily suspended the automatic USDC to BUSD conversion due to current market conditions, specifically related to high inflows and the increasing load to support the conversion,” Binance tweeted. “This is a normal risk management procedural step that should be taken while we monitor the situation.”
coin base fixed: “We temporarily pause USDC:USD conversions over the weekend while banks are closed. During peak periods, conversions are based on USD transfers from banks that settle during normal banking hours. When the banks open on Monday, we plan to restart the conversions.” Crypto payment processor Bitpay has also pause USDC payments and debit card charges.
Singapore-based 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 continues to be available,” the company said. saying on Saturday. “We will continue to assess the situation and plan to resume USDC trading as soon as possible.”
USDC untying has caused a ripple effect of untying issues for five different stablecoin projects, including GUSD, DAI, FRAX, USDP, and USDD. FRAX is currently trading at $0.91, USDD is trading at $0.94, USDP is trading at $0.95, DAI is trading at $0.92, and GUSD is trading at $0.97 per unit. The largest stablecoin by market capitalization, tether (USDT)it has stayed within the range of $0.99 to $1 since the SVB issues began.
What do you think about the challenges facing stablecoins today? Share your views on this topic in the comments section below.
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