81–90 of 204 posts
In such a case, Circle, as required by law under stored-value money transmission regulation, will stand behind USDC and cover any shortfall using corporate resources, involving external capital if necessary. I don't get it..the money is gone. Is there something I am missing here? You cannot just magically fix a shortfall.
I’m not very knowledgeable on this topic, so I have a legit question about all of this: How is pausing withdrawals not blatant currency manipulation? If I had USDC and lost all faith in it yesterday, shouldn’t I be allowed to cash out today? Also, if they’ve got many billions in cash, why would losing access to a sliver of it justify shutting down withdrawals? “Trust us, it’s worth a dollar! Or don’t trust us! It doe…
They didn't pause anything. The US banks did, by not working in the weekend (for large sums). If you had 1 billion USD with your favorite US bank, that would be paused too right now.
It seems like they’re simply forcing people to hold USDC, full stop, and are blaming banks for their decision to do so.
I’m not very knowledgeable on this topic, so I have a legit question about all of this: How is pausing withdrawals not blatant currency manipulation? If I had USDC and lost all faith in it yesterday, shouldn’t I be allowed to cash out today? Also, if they’ve got many billions in cash, why would losing access to a sliver of it justify shutting down withdrawals? “Trust us, it’s worth a dollar! Or don’t trust us! It doe…
One could ask whether halting trading of a stock is manipulation or not. Some risks arise mostly out of urgency, and not having countermeasures could have catastrophic results which otherwise would have been avoided by pausing the process. If Circle were operating as a fractional reserve bank where it borrowed from you by virtue of a positive bank balance, lent me 80% of that, and only kept 20%; pausing honouring wit…
If your pastry shop had 40 billion donuts, and you claim that 10 billion of those donuts are available for sale immediately, do you close your shop when you lose 3.3 billion of them, leaving you with only 6.7 billion donuts that are still sitting there?
Earlier quoted context omitted.
Short? I can't see this not returning to it's peg by the next news cycle. It's free money. SVB went bankrupt - as a business: it can't pay its bills. People are reacting to this as if the deposits have vanished entirely. If you think USDC is a shorting opportunity, short anything crypto. USDC is literally the second largest domino.
There is good chance that ~30% of deposits above 250k vanished. SVB really screwed up on trades. With equity at zero or close to zero, there is no backstop. Net present value of 2% securities that SVB loaded on is way below par.
EDIT - Do you have a the $60+ billion figure? All I am seeing is a $2 billion dollar shortfall.
Earlier quoted context omitted.
The peg is held up by the belief that you can always get 1 USD for 1 USDC. Obviously the market had some doubts about this today and then liquidity issues drove the price down. I'm somewhat surprised that it climbed back up this fast which means that the panic seems to be over (for the moment).
That means it's not really a peg. If you have a peg, it means that the currency issuer is willing to buy their currency for a set amount. Right now, Circle isn't willing to buy USDC for $1 USD - therefore, there is no peg. Or maybe what we're talking about is a broken peg. Circle was willing to pay $1 USD for a USDC, but they're no longer willing to pay that (at least temporarily). Maybe countries have seen their peg…
What has changed is that third parties no longer have sufficient faith in that to extend the offer to 24/7. e.g. before Coinbase would give you USD for your USDC on Saturday morning because they were happy enough that they could take the USDC back to Circle and exchange into USD on Monday morning and that they had sufficient USD for the amount of people who were actually going to take them up on that.
Now because of either the worry about SVB contagion or the amount of withdrawals vs coinbase's usd reserves, coinbase is no longer willing to give you an advance on that action, and is making you wait until they can immediately exchange the usdc you give them for usd from circle. Coinbase was never the one under the obligation to give you USD for USDC anyway.
Obviously this is a little more complicated by Coinbase's 50% stake in Circle, but that's only relevant if a bankruptcy courts found misdeeds and a judge ruled Coinbase had to make up the shortfall due to said misdeeds, it's not a reason to be able to enforce Circle's liabilities on Coinbase as a day to day business matter.
I have always kept away from circle after they were caught manipulating reviews. https://www.reddit.com/r/Bitcoin/comments/5ms1zc/after_being...
Was the app ever banned or everything proceeded as normal? Is Apple in Circle's pocket somehow?
I’m not very knowledgeable on this topic, so I have a legit question about all of this: How is pausing withdrawals not blatant currency manipulation? If I had USDC and lost all faith in it yesterday, shouldn’t I be allowed to cash out today? Also, if they’ve got many billions in cash, why would losing access to a sliver of it justify shutting down withdrawals? “Trust us, it’s worth a dollar! Or don’t trust us! It doe…
Because crypto is not currency. It’s more like the fake money at Habbo Hotel
23% of the reserve, or $9.7B is held in cash. I think on Thursday, SVB saw cash outflow requests over $40b in one day. USDC peg is so far below 1 right now there will definitely be a lot of par arbitrage Monday trying to withdraw. Hopefully it doesn’t take longer than a day for them to settle treasury trades, and maybe some people have lost the keys to their crypto. They could also possibly have a line of credit with…
The creators of USDC could destroy their own coins to restore the 1:1 reserve peg. I doubt they'd do it, but it would immediately restore confidence. Send them to a null address or commit to burning them in software. If they can restore the reserve, they could remint them. I'm a crypto bear (with modest crypto holdings for diversification), and I think this is an opportunity for these folks to step up to the plate an…
Earlier quoted context omitted.
They didn't pause anything. The US banks did, by not working in the weekend (for large sums). If you had 1 billion USD with your favorite US bank, that would be paused too right now.
I’m hearing that you can’t even use USDC to exchange for bitcoin/ETH on Coinbase right now. What does converting between types of crypto have to do with banks? Those transactions should in theory have nothing to do with a banking transaction. It seems like they’re simply forcing people to hold USDC, full stop, and are blaming banks for their decision to do so.