Stablecoin Financial News

Stablecoin issuer Circle has announced it has cleared "substantially all" of the backlog of redemption requests for its stablecoin USD Coin (USDC).

The beginning of 2023 raised hopes that the blockchain industry was on the path toward recovery, but weaker-than-hoped financial performance and a bout of negative news in February have cast doubts on this outlook. However, these headwinds do not affect all sectors of the industry uniformly. Nonfungible tokens (NFTs) and security tokens have managed to decouple from the broader environment and showed positive signs in February, but the rest of the market remains cautious.

The investment arm of major cryptocurrency exchange KuCoin is moving to support new stablecoin initiatives by backing a Chinese yuan-pegged stablecoin issuer.

Circle CEO and co-founder, Jeremy Allaire, confirmed that, as of March 13, the stablecoin issuer has been “able to access” its $3.3 billion of funds held with the collapsed bank, Silicon Valley Bank (SVB).

National Australia Bank (NAB) announced March 14 that it had executed the first-ever cross-border stablecoin transfer on a layer 1 public blockchain. The intrabank transfer used the bank’s fully backed AUDN stablecoin tied to the Australian dollar (AUD). 

The ongoing crisis of banks in the United States has many positive implications for Bitcoin (BTC), according to an executive at the hardware wallet firm Trezor.

Amid multiple ongoing investigations, FTX continues to move funds. Addresses related to the failed crypto exchange reportedly transferred around $145 million in stablecoins to various platforms. 

Flex Yang, the former CEO and founder of Babel Finance, has introduced a new decentralized stablecoin backed by crypto-native reserves and an entire DeFi ecosystem built around it.

Bitcoin and other cryptocurrencies rallied on Monday after U.S. authorities announced plans to limit the fallout from the collapse of Silicon Valley Bank (SVB) and as cryptocurrency firm Circle assured investors its peg was secure. The U.S. Treasury and Federal Reserve announced a range of measures to stabilise the banking system and said depositors at SVB would have access to their deposits on Monday. The moves came as authorities took possession of New York-based Signature Bank, the second bank failure in a matter of days.Stablecoin USD Coin (USDC), which had lost its 1:1 dollar peg and hit an all-time low on Saturday on concerns over the exposures of Circle, the firm behind USDC, to Silicon Valley Bank, recovered. It was at $0.9917, closer to par and up from last week's lows around $0.88.

The depegging of USD Coin (USDC) and Dai (DAI) from the United States dollar prompted a frenzy of loan repayments over the weekend, allowing debtors to save a total of more than $100 million on their loans.

The United States Justice Department is reportedly investigating the collapse of the TerraClassicUSD (USTC) stablecoin which contributed to a $40 billion wipe out in the Terra ecosystem last May.

Over the past week, investors understandably became concerned over the news that billions of dollars backing USD Coin (USDC) — the second-largest stablecoin — were locked up in the distressed Silicon Valley Bank (SVB). The market reacted violently, causing USDC to lose its dollar peg. But while the concern was understandable, it has become clear that USDC creator Circle will regain full access to its funds. The crypto community can breathe easily.

Caroline Hill, the director of global policy and regulatory strategy for stablecoin issuer Circle, has placed some of the blame from the recent collapse of banks tied to crypto on traditional financial institutions rather than digital assets.

The price of Bitcoin (BTC) increased by 14.4% between March 12-13 after it was confirmed that financial regulators had rescued depositors in the failing Silicon Valley Bank (SVB). The intraday high of $24,610 may not have lasted long, but $24,000 represents a 45% increase year-to-date.

US-based cryptocurrency exchange Coinbase announced the suspension of trading for the Binance  USD (BUSD) stablecoin on March 13 via Twitter. 

Crypto exchange Gemini had no funds at Signature Bank, and its Gemini US Dollar (GUSD) stablecoin was not backed by any deposits at the failed bank, according to a March 13 official tweet from the company.

Banks are the lifeblood of a nation’s economic system, and any bank collapse is disturbing. Last week saw two failures. On March 8, Silvergate Capital — the cryptocurrency-focused banking company — entered into voluntary liquidation. On March 10, United States regulators shut down and seized the deposits of tech-oriented Silicon Valley Bank in what was being called the second-largest bank failure in U.S. history. Both California institutions were victims of bank deposit runs. 

The panic caused due to USD Coin's (USDC) depeg from the U.S. dollar manifested itself in a wrong order, costing traders $50,000 per Bitcoin (BTC), albeit for several minutes.

Circle has revealed that Cross River Bank — recognized for its services to fintech and crypto firms like Visa and Coinbase — is now its new commercial banking partner for producing and redeeming USD Coin (USDC).

stablecoin got caught up in the collapse of a California bank late last week, it reprised the now-famous maxim of Nobuhiro Kiyotaki and John Moore. “Evil,” the economists had claimed in a 2001 lecture, later made available as a paper of the same title, “is the root of all money.” Turning a popular aphorism on its head was a ploy by the professors to enliven a technical discussion. “Evil is a strong word,” they wrote. “You may find the moral category too severe for something as mild as breaking a promise. In which case, you may want to change the title to ‘Distrust Is the Root of All Money.’ But that wouldn’t have quite the same ring.” Events last week showed that Kiyotaki-Moore may have been right, not just in their analysis but also in their hyperbole: People accept and hold money not because it circulates freely and is widely used to store value, but because it helps the society overcome the scourge of broken promises. For something to aspire to money-ness, it must be free of even the slightest doubt in that regard. That was clearly not the case with Circle Internet Financial Ltd.’s USD Coin, or USDC, the No. 2 dollar clone behind Tether. News that around 8% of the crypto firm’s reserves were on deposit at Silicon Valley Bank, which was closed down by regulators Friday, sent the price of the stablecoin sharply below $1, falling to less than 85 cents before recovering. In the language of money-market funds — the older, more conventional cousins of blockchain-based stablecoins — USDC broke the buck. Circle may still keep its promise of redeeming all its coins 1:1 for dollar. But a small doubt that it may not be able to do so arose. Even if briefly, USDC has lost its claim of being money.

The failure of three major crypto-backing banks, Silicon Valley Bank (SVB), Silvergate Bank and Signature Bank caused the stablecoin (USDC) to fall to as low as $0.87 from its $1 benchmark.