Coinbase suspending USDC:USD conversions over the weekend

Circle held around $3.3 billion in Silicon Valley Bank, leading to a run on USDC which resulted in it trading for as little as $0.95 on some exchanges today (Mar 10, 2023). This represents around 30% of USDC's cash reserves and 7% of its total reserves. The balance of reserves are held in T-Bills, which are liquid and typically can only be traded during market hours. Coinbase itself has around $2B of USDC on hand. Circle's rumored exposure to Silvergate's collapse is also a concern.

If more than $7.8B of USDC were to be liquidated over the weekend, USDC would be effectively insolvent. Freezing trades until the market reopens limits this. USDC should rapidly stabilize due to being backed by very liquid hard assets, but it will probably lose significant marketshare to Tether.

UPDATE: USDC Liquidity pools on other exchanges are becoming completely drained, pulling down the peg. https://www.reddit.com/r/CryptoCurrency/comments/11oaz39/coi...

Re: Coinbase suspending USDC:USD conversions over the weekend

#5

Post by mtlmtlmtlmtl » Sat, Mar 11, 2023, 4:51 AM UTC

kersplody wrote: post #4

USDC is managed the Centre consortium, which was founded by Circle and includes Coinbase as a member. Circle held around $3.3 billion in Silicon Valley Bank, leading to a run on USDC which resulted in it trading for as little as $0.95 on some exchanges today (Mar 10, 2023). This represents around 30% of USDC's cash reserves and 7% of its total reserves. The balance of reserves are held in T-Bills, which are liquid an…

Can't help but revel in the fact that these crypto ponzi schemes are so dependent on the very banks all the cryptobros denounce, as evil holdovers from the past that will be obsoleted by their scam tokens (that no one outside their bubble even knows how to use).

It's so ridiculous I just have to kind of admire it. It's like a cathedral of human hypocrisy.

Re: Coinbase suspending USDC:USD conversions over the weekend

#6

Post by drcode » Sat, Mar 11, 2023, 4:57 AM UTC

kersplody wrote: post #4

USDC is managed the Centre consortium, which was founded by Circle and includes Coinbase as a member. Circle held around $3.3 billion in Silicon Valley Bank, leading to a run on USDC which resulted in it trading for as little as $0.95 on some exchanges today (Mar 10, 2023). This represents around 30% of USDC's cash reserves and 7% of its total reserves. The balance of reserves are held in T-Bills, which are liquid an…

Circle used SVB, not Coinbase

(I'm no expert though, correct me if I'm wrong)

Edit: Parent comment is now correct

Re: Coinbase suspending USDC:USD conversions over the weekend

#7

Post by basch » Sat, Mar 11, 2023, 4:57 AM UTC

mtlmtlmtlmtl wrote: post #5

kersplody wrote: post #4

USDC is managed the Centre consortium, which was founded by Circle and includes Coinbase as a member. Circle held around $3.3 billion in Silicon Valley Bank, leading to a run on USDC which resulted in it trading for as little as $0.95 on some exchanges today (Mar 10, 2023). This represents around 30% of USDC's cash reserves and 7% of its total reserves. The balance of reserves are held in T-Bills, which are liquid an…

Can't help but revel in the fact that these crypto ponzi schemes are so dependent on the very banks all the cryptobros denounce, as evil holdovers from the past that will be obsoleted by their scam tokens (that no one outside their bubble even knows how to use). It's so ridiculous I just have to kind of admire it. It's like a cathedral of human hypocrisy.

How is a stable coin a Ponzi scheme?

Re: Coinbase suspending USDC:USD conversions over the weekend

#8

Post by Waterluvian » Sat, Mar 11, 2023, 4:57 AM UTC

That’s kind of amusing. By using a traditional bank to store their gold standard bullion, they had exposure to centralized banking risk, which was realized, and caused the crypto to get locked in.

It’s like some sort of wacky deadlock condition.

Re: Coinbase suspending USDC:USD conversions over the weekend

#9

Post by [deleted] » Sat, Mar 11, 2023, 4:59 AM UTC

mtlmtlmtlmtl wrote: post #5

kersplody wrote: post #4

USDC is managed the Centre consortium, which was founded by Circle and includes Coinbase as a member. Circle held around $3.3 billion in Silicon Valley Bank, leading to a run on USDC which resulted in it trading for as little as $0.95 on some exchanges today (Mar 10, 2023). This represents around 30% of USDC's cash reserves and 7% of its total reserves. The balance of reserves are held in T-Bills, which are liquid an…

Can't help but revel in the fact that these crypto ponzi schemes are so dependent on the very banks all the cryptobros denounce, as evil holdovers from the past that will be obsoleted by their scam tokens (that no one outside their bubble even knows how to use). It's so ridiculous I just have to kind of admire it. It's like a cathedral of human hypocrisy.

[deleted]

Re: Coinbase suspending USDC:USD conversions over the weekend

#10

Post by mtlmtlmtlmtl » Sat, Mar 11, 2023, 5:03 AM UTC

basch wrote: post #7

mtlmtlmtlmtl wrote: post #5

Earlier quoted context omitted.

Can't help but revel in the fact that these crypto ponzi schemes are so dependent on the very banks all the cryptobros denounce, as evil holdovers from the past that will be obsoleted by their scam tokens (that no one outside their bubble even knows how to use). It's so ridiculous I just have to kind of admire it. It's like a cathedral of human hypocrisy.

How is a stable coin a Ponzi scheme?

How is a stablecoin stable? They're stable until you get rugpulled.