{"id":565190,"date":"2023-03-17T23:15:00","date_gmt":"2023-03-17T20:15:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/usdc-depeg-will-hinder-stablecoins-growth-increase-regulatory-scrutiny-moodys\/"},"modified":"2023-03-17T23:15:00","modified_gmt":"2023-03-17T20:15:00","slug":"usdc-depeg-will-hinder-stablecoins-growth-increase-regulatory-scrutiny-moodys","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/usdc-depeg-will-hinder-stablecoins-growth-increase-regulatory-scrutiny-moodys\/","title":{"rendered":"# USDC depeg will hinder stablecoins\u2019 growth, increase regulatory scrutiny \u2014 Moody\u2019s"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 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-6a3befc06a8cd\" 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-6a3befc06a8cd\" 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-depeg-will-hinder-stablecoins-growth-increase-regulatory-scrutiny-moodys\/#%E2%80%9D_USDC_depeg_will_hinder_stablecoins_growth_increase_regulatory_scrutiny_%E2%80%94_Moodys_%E2%80%9C\" >&#8221; USDC depeg will hinder stablecoins\u2019 growth, increase regulatory scrutiny \u2014 Moody\u2019s &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_USDC_depeg_will_hinder_stablecoins_growth_increase_regulatory_scrutiny_%E2%80%94_Moodys_%E2%80%9C\"><\/span>&#8221; USDC depeg will hinder stablecoins\u2019 growth, increase regulatory scrutiny \u2014 Moody\u2019s &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjMtMDMvNjExMjA4MzItY2E3MC00OTVlLTgxODUtZTJhZGFjZDBhOTA3LmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-48054ca8>Recent turmoil in the traditional banking sector, culminating in USD Coin (USDC) losing its peg, could negatively affect stablecoin adoption and potentially increase calls for regulation, argued credit rating agency Moody\u2019s Investors Service.\u00a0<\/p>\n<p>In its latest \u201cSector Comment\u201d report published on March 16, Moody\u2019s says fiat-backed stablecoins could face new resistance following\u00a0USDC\u2019s depegging on March 10. <\/p>\n<p>\u201cUntil now, large fiat-backed stablecoins had shown remarkable resilience, having emerged unscathed from past scandals such as the collapse of FTX,\u201d wrote analysts Cristiano Ventricelli, Vincent Gusdorf, Rajeev Bamra and Fabian Astic. \u201cHowever, recent events have shown that the reliance of stablecoin issuers on a relatively small set of off-chain financial institutions limits their stability.\u201d<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Customers lining up outside of Silicon Valley Bank at its Menlo Park, CA branch. <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/SDNrSUC1C0\">pic.twitter.com\/SDNrSUC1C0<\/a><\/p>\n<p>\u2014 Cointelegraph (@Cointelegraph) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/Cointelegraph\/status\/1634254701838360577?ref_src=twsrc%5Etfw\">March 10, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>The sudden collapse of Silicon Valley Bank on March 10 was a significant risk event for USDC issuer Circle Internet Financial, which had $3.3 billion in assets tied up in the bank. Over the span of three days, Circle <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.reuters.com\/technology\/crypto-investors-pull-3-bln-stablecoin-usdc-three-days-2023-03-16\/\">cleared<\/a> roughly $3 billion in USDC redemptions as the value of its stablecoin plunged to a low of around $0.87. <\/p>\n<p>By end of U.S. banking operations on March 15, Circle had \u201ccleared substantially all of the backlog of minting and redemption requests for USDC,\u201d the company said.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">Update: As of close of U.S. banking operations Wednesday, March 15, we have cleared substantially all of the backlog of minting and redemption requests for USDC. Get the details: <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/5WEAgPps0E\">https:\/\/t.co\/5WEAgPps0E<\/a><\/p>\n<p>\u2014 Circle (@circle) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/circle\/status\/1636177961312301058?ref_src=twsrc%5Etfw\">March 16, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>USDC quickly regained its peg after the Federal Deposit Insurance Corporation announced that it would backstop all deposits held at Silicon Valley Bank. Circle CEO Jeremy Allaire told Bloomberg on March 14 that his firm could now fully access its $3.3 billion reserves. <\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Crypto Biz: SVB collapses, USDC depegs, Bitcoin still up<\/em><\/strong><\/p>\n<p>Although calls to regulate stablecoins have grown louder following the collapse of Terra, fiat-backed stablecoins like the one issued by Circle operate differently than Terra\u2019s algorithmic token that failed in May 2022. Nevertheless, Moody\u2019s believes that regulators are likely to pursue more stringent oversight of the sector moving forward. <\/p>\n<p>The credit rating agency said that USDC was able to regain its peg only once U.S. regulators decided to repay Silicon Valley Bank\u2019s unsecured deposits. \u201cOtherwise, USDC could have suffered from a run and been forced to liquidate its assets,\u201d Moody\u2019s analysts said, adding: <\/p>\n<blockquote><p>\u201cGiven the current market volatility, such a scenario could, in turn, have caused more runs on banks holding Circle&#8217;s assets, which could have led to the depegging of other stablecoins.\u201d<\/p><\/blockquote>\n<p><template data-name=\"subscription_form\" data-type=\"crypto_biz\"><\/template><\/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 <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> 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-depeg-will-hinder-stablecoins-growth-increase-regulatory-scrutiny-moody-s\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; USDC depeg will hinder stablecoins\u2019 growth, increase regulatory scrutiny \u2014 Moody\u2019s &#8220; Recent turmoil in the traditional banking sector, culminating in USD Coin (USDC) losing its peg, could negatively affect stablecoin adoption and potentially increase calls for regulation, argued credit rating agency Moody\u2019s Investors Service.\u00a0 In its latest \u201cSector Comment\u201d report published on March&#8230;<\/p>\n","protected":false},"author":1,"featured_media":565191,"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\/61120832-ca70-495e-8185-e2adacd0a907.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[75936,75493,82350,117],"class_list":["post-565190","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-circle","tag-stablecoin","tag-usd-coin","tag-business"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/565190","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=565190"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/565190\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/565191"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=565190"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=565190"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=565190"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}