Are people withdrawing the USDC coins or the USD behind the coins?
The crypto coins. Binance is a Crypto to Crypto exchange. You can't deposit or withdraw USD from Binance.
Any idea why a New York bank is relevant then (per CZ)?
Binance freezes withdrawals of stablecoin USDC as investors pull $2B
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Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B
#22> The world's biggest crypto exchange will freeze all withdrawals of USD Coin while it conducts a "token swap" to boost its holdings of the dollar-pegged cryptocurrency, the crypto group's CEO Changpeng Zhao said Tuesday
It's worth noting that USDC is not even a token controlled by Binance. It's controlled and issued by Circle. So effectively, Binance is refusing to honor its commitment to depositors to give them their money on demand.
That's called a "default."
Why? The article says something about a key bank being closed. Nonsense. Is the USDC held at that bank? No. Binance is allegedly holding it. Only clearly they're not because they can't produce it on demand.
I'm frankly amazed that people with the ability to understand this alphabet soup mumbo jumbo keep falling for the same scam over and over again. Underneath all of the slick marketing and nerd posturing is a simple truth: these are all fractional reserve systems. Conceptually, they are no different than banks or pyramid schemes.
The only possible reason you want a stable coin, rather than dollars, in the first place is because you're doing something that requires you to route around US financial regulation.
The US dollar is digital. It moves around the world using a digital network. It's traded the world over by almost every country whether they want to or not. You can buy almost anything there is to buy with US dollars.
You "need" a stable coin because you're trying to have your cake and eat it too: US dollar-like liquidity and value preservation without US dollar financial regulation.
Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B
#23“Crypto sucks. This is proof.”
Exchanges going under proves that people are greedy and/or stupid, but it doesn’t inherently mean every crypto project is bad. It doesn’t seem like people holding their own keys are having a bad time right now. Sure, prices of these assets are down, but a hardware wallet is an easy way to make sure your assets don’t end up being given away during a bankruptcy proceeding.
Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B
#24“Crypto sucks. This is proof.” Exchanges going under proves that people are greedy and/or stupid, but it doesn’t inherently mean every crypto project is bad. It doesn’t seem like people holding their own keys are having a bad time right now. Sure, prices of these assets are down, but a hardware wallet is an easy way to make sure your assets don’t end up being given away during a bankruptcy proceeding.
> doesn’t inherently mean every crypto project is bad
No, but it’s lost the benefit of doubt.
Starting from the position that crypto is likely fraud, and those participating in it are facilitating (wittingly or not) money laundering, is spreading from financial peripheries to money centre economies.
Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B
#25Yikes. This could be the first inning of the Tether bubble deflating, and by extension half the crypto market.
We will have to wait and see all the major stable coins still holding pegs
Didn't something similar happen in 2008 as well? When mortgage backed securities dropped but the opposite default swaps (?, I'd have to look it up), didn't move?
Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B
#26Out of curiosity, did Binance's recent faux-audit cover USDC reserves?
Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B
#27“Crypto sucks. This is proof.” Exchanges going under proves that people are greedy and/or stupid, but it doesn’t inherently mean every crypto project is bad. It doesn’t seem like people holding their own keys are having a bad time right now. Sure, prices of these assets are down, but a hardware wallet is an easy way to make sure your assets don’t end up being given away during a bankruptcy proceeding.
After all of this fallout, the only people left that will even touch crypto will be the ones that understand how to set up and use a hardware wallet.
I don't think that will be a very large market.
Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B
#28“Crypto sucks. This is proof.” Exchanges going under proves that people are greedy and/or stupid, but it doesn’t inherently mean every crypto project is bad. It doesn’t seem like people holding their own keys are having a bad time right now. Sure, prices of these assets are down, but a hardware wallet is an easy way to make sure your assets don’t end up being given away during a bankruptcy proceeding.
> doesn’t seem like people holding their own keys are having a bad time right now
Considering that, instead of owning productive assets that make society better as a whole and provide real value to people, they own tokens that so far do nothing and are only useful due to the exchanges, then yes... that's a pretty bad time.
Re: Binance freezes withdrawals of stablecoin USDC as investors pull $2B
#29Yikes. This could be the first inning of the Tether bubble deflating, and by extension half the crypto market.
We will have to wait and see all the major stable coins still holding pegs
> the major stable coins still holding pegs
How? In what assets? Even in Treasuries, tens of billions of unexpected sales in an off run will depress prices. If deposited in a podunk bank, it might literally go under.