{"id":563284,"date":"2023-03-14T01:35:34","date_gmt":"2023-03-13T22:35:34","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/usdc-depegged-but-its-not-going-to-default\/"},"modified":"2023-03-14T01:35:34","modified_gmt":"2023-03-13T22:35:34","slug":"usdc-depegged-but-its-not-going-to-default","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/usdc-depegged-but-its-not-going-to-default\/","title":{"rendered":"# USDC depegged, but it&#8217;s not going to default"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a26bb00dfc07\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a26bb00dfc07\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/usdc-depegged-but-its-not-going-to-default\/#%E2%80%9D_USDC_depegged_but_its_not_going_to_default_%E2%80%9C\" >&#8221; USDC depegged, but it&#8217;s not going to default &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/usdc-depegged-but-its-not-going-to-default\/#It_started_as_a_tremor\" >It started as a tremor<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/usdc-depegged-but-its-not-going-to-default\/#Rumors_of_USDCs_demise_have_been_exaggerated\" >Rumors of USDC\u2019s demise have been exaggerated<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_USDC_depegged_but_its_not_going_to_default_%E2%80%9C\"><\/span>&#8221; USDC depegged, but it&#8217;s not going to default &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-48054ca8>Over the past week, investors understandably became concerned over the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> that billions of dollars backing USD Coin (USDC) \u2014 the second-largest stablecoin \u2014 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.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"It_started_as_a_tremor\"><\/span>It started as a tremor<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Hundreds of sensors are buried on the ocean floor off the coast of Japan. Trained to detect the slightest hints of a tremor, they wire data at light speed to laboratories on the main island. In the event of the fault lines that bifurcate the ocean trenches hitting violently together, the seismic activity will be detected, giving islanders precious minutes in which to retreat to high ground before a tsunami hits.<\/p>\n<p>Last week, the seismograph that records the financial health of the United States banking system began plotting jagged lines. Something had broken deep beneath the surface, and it was clear that trouble was on its way. On Friday, reports emerged that Silicon Valley Bank, relied on by thousands of tech startups including crypto companies, had run out of cash. Wires sent in the night before for processing were not being fulfilled.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-03\/a6576980-846d-4a5f-8440-f1bb011312f7.jpg\"><\/figure>\n<p>The seismograph, which had already detected an uptick in activity with the collapse of Silvergate Bank days earlier, had begun to shake. It was clear that a tsunami was brewing. Over the weekend, with U.S. banks closed and SVB customers anxiously waiting for news of a bailout to protect their deposits, pressure has mounted on high-profile businesses to disclose their holdings.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Why the Probability of <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/search?q=%24USDC&amp;src=ctag&amp;ref_src=twsrc%5Etfw\">$USDC<\/a> Defaulting Is Low.<\/p>\n<p>With the recent news of USDC\u2019s potential default, many are panicking.<\/p>\n<p>But is it as bad as it seems?<br \/>Here\u2019s why the probability of USDC defaulting is actually low: (thread) <\/p>\n<p>\u2014 Gracy Chen (@GracyBitget) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/GracyBitget\/status\/1634607332230578176?ref_src=twsrc%5Etfw\">March 11, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>Circle, the issuer of the 100% fiat collateralized USDC stablecoin, is one of them. On Saturday, it released a statement confirming that $3.3 billion of the $40 billion used to back USDC is held with Silicon Valley Bank. Rather than reassuring investors that the bulk of Circle\u2019s funds is safe, the revelation had the reverse effect: Confidence in USDC wobbled, and the stablecoin, which had clung closely to its $1 peg throughout its four-year lifespan, began to fall.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Kraken staking ban is another nail in crypto\u2019s coffin \u2014 And that\u2019s a good thing<\/em><\/strong><\/p>\n<p>People clamored to short USDC, with major derivatives trading platforms even opening a dedicated market for the purpose. Arbitrageurs began profiting from price inefficiencies as panicked USDC holders sought sanctuary in other stablecoins at any cost, and other stablecoins, in turn, such as the USDC-collateralized Frax and Dai (DAI), also lost their peg. It\u2019s clear there\u2019s a wave heading for the shore.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Rumors_of_USDCs_demise_have_been_exaggerated\"><\/span>Rumors of USDC\u2019s demise have been exaggerated<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>While SVB shareholders are not slated for a bailout, the U.S. federal government announced it would cover the bank\u2019s uninsured depositors. Circle will be fine. But what about USDC? Over the weekend, the once-stable token plunged to a low of $0.88 as traders tried to price in USDC being under-collateralized. As of March 13, USDC has recovered to a range between $0.99 and $1.01.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Should Bored Ape buyers be legally entitled to refunds?<\/em><\/strong><\/p>\n<p>As the dust settles, however, questions hang over not just USDC but all stablecoins and their ability to maintain their pegs through thick and thin. The panic over Silicon Valley Bank is almost over. Now, the onus is on the crypto industry to regain trust in the stablecoins that are the bedrock of the business. \u201cDon\u2019t trust, verify\u201d is crypto\u2019s core mantra. And yet, for all the cryptographic proof, it remains a business, like TradFi, that runs on faith.<\/p>\n<p>It may not have developed into a Richter-shattering earthquake, but the tremors caused by Circle\u2019s exposure to SVB have reverberated through the crypto sphere. Achieving stability in an unstable world is a challenge that\u2019s bigger than crypto. Preventing future systemic shocks calls for a rethink of the tenets we once held to be infallible.<\/p>\n<div>\n<div style=\"background: rgb(239, 239, 239); border: 1px solid rgb(204, 204, 204); padding: 10px;\"><strong>Gracy Chen<\/strong> is the managing director of the cryptocurrency exchange Bitget where she covers matters of market expansion, business strategy and corporate development. Before joining Bitget, she held executive roles at XRSPACE, a VR <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> company, and was an early investor in BitKeep, Asia\u2019s leading decentralized wallet. In 2015, Gracy was named a Global Shaper by the World Economic Forum. A graduate of the National University of Singapore, she is earning an MBA degree at the Massachusetts Institute of Technology.<\/div>\n<\/div>\n<p class=\"post-content__disclaimer\"><em>This article is for <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/usdc-depegged-but-it-s-not-going-to-default\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; USDC depegged, but it&#8217;s not going to default &#8220; Over the past week, investors understandably became concerned over the news that billions of dollars backing USD Coin (USDC) \u2014 the second-largest stablecoin \u2014 were locked up in the distressed Silicon Valley Bank (SVB). The market reacted violently, causing USDC to lose its dollar peg&#8230;.<\/p>\n","protected":false},"author":1,"featured_media":563285,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/cdn-cgi\/image\/format=auto,onerror=redirect,quality=90,width=1200\/https:\/\/s3.cointelegraph.com\/uploads\/2023-03\/2e68b111-c6ad-4499-b962-619b1107748e.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74888,75022,75936,74868,75493,71939,70610,33355],"class_list":["post-563284","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-banking","tag-central-bank","tag-circle","tag-defi","tag-stablecoin","tag-banks","tag-finance","tag-silicon-valley"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/563284","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=563284"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/563284\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/563285"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=563284"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=563284"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=563284"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}