Crypto shaken as SVB Exposure depegs $36bn Stablecoin | Business

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The second-largest stablecoin in the crypto sector fell from its dollar peg on Saturday, trading as low as 81.5 cents, hurt by the exposure of its issuer Circle Internet Financial Ltd., to the collapsed Silicon Valley Bank. | News24_Business

Stablecoins like USDC are intended to hold a set value against another, highly liquid asset like the US dollar. They come in a variety of forms, and some, like Circle's, are underpinned by reserves of cash and bonds. Investors often park funds in stablecoins as they move between crypto trades.. said it would be"temporarily pausing" the conversion of USDC into US dollars during the weekend and would resume on Monday when banks open.

"Unless there’s a concrete bailout plan this weekend, I think markets will be ugly again next week,” said Teong Hng, chief executive officer at crypto investment firm Satori Research, about the failure of SVB.The crypto sector was already reeling from a prolonged rout that's knocked $2 trillion off the value of digital assets since November 2021, precipitating a series of implosions such as the TerraUSD stablecoin, the Three Arrows Capital hedge fund and the FTX exchange.

"I think the market 'panic priced' USDC like it priced USDT around the Luna collapse," said Haohan Xu, CEO of Apifiny, an institutional trading platform."It's driven by Circle's exposure at SVB plus Coinbase closing off its USDC convert function."Crypto firms, including Binance and Tether, on Friday, used Twitter to try to reassure their customers about any risks posed by the failed bank.

 

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_Business They can now refer to it as 'not so stable coin'.

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