On Saturday, March 11, 2023, crypto supporters are concerned as several stablecoin assets de-pegged from $1 parity The second largest stablecoin issued by Circle Financial USDC, fell below $0.90 to a low of $0.877 per coin. Additionally, about five other stablecoins fell below USD parity during Saturday’s early morning (ET) trading session.
Major crypto exchanges suspended trading in USDC, raising concerns
On March 11, 2023, stablecoin assets went through a rough patch after Circle Financialannouncedthat $3.3 billion in cash supporting usd coin (USDC) was being held at Silicon Valley Bank (SVB). The news sent USDC falling from USD to a low of $0.877 per coin on Saturday. As of 7:45 AM JST, USDC was trading at$0.91 per pieceand was up 3% from its low of $0.87.
– BitPay (@BitPay) on March 11, 2023
Following the USDC depegging, several major crypto exchanges including Binance and Coinbase have stopped trading USDC.” Binance has temporarily suspended automatic conversion from USDC to BUSD due to current market conditions, especially related to the increasing burden of supporting high inflow&conversions.” Binance tweeted.” This is a normal risk management procedural step to take while monitoring the situation.”
Coinbasesaid: “We are temporarily suspending USDC:USD conversions over the weekend while banks are closed. During periods of heightened activity, conversions rely on USD transfers from banks that are settled during normal banking hours. Once banks open on Monday, conversions will resume.” Crypto payment processor Bitpay has alsosuspendedUSDC payments and debit card loading.
Singapore-based crypto exchange Crypto.com also suspended USDC deposits on the 11th.” As a precaution, we are temporarily suspending USDC to USD conversions, USDC deposits, and USDC pairs trading due to current market conditions; USDC withdrawals will remain available,” the company said,on Saturday.” We will continue to evaluate the situation and will resume USDC trading as soon as possible.”
The USDC depeg has caused a ripple effect of the depegging issue onfive different stablecoin projectsincluding GUSD, DAI, FRAX, USDP, and USDD; FRAX is currently $0.91, USDD is $0.94, USDP is $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)has hovered in the $0.99 to $1 range since the SVB issue began.
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