Are dollar-backed stablecoins as stable as crypto advocates say?

The American banking crisis, from the collapse of Silvergate to Silicon Valley Bank, reveals how heavily regulated, dollar-backed stablecoins like USDC USDC 0.0% aren’t as stable as crypto advocates suggest.

Did SVB collapse expose a weakness?

SVB's collapse exposed a weakness. Tether, which has $75 billion of its stablecoin outstanding, is known for its shadowy management, aversion to disclosure and has had numerous run-ins with regulators. The third largest stablecoin, behind USDC, is Binance’s BUSD.

Will SVB's Bank run become a contagion?

Regulators moved quickly to halt SVB’s bank run from becoming a contagion, but when the dust settled USDC’s market value had fallen to $38 billion from $44 billion (USDC’s value peaked at $55 billion in June 2022).

Does Silicon Valley have a stablecoin?

Silicon Valley was one such firm, though these types of firms probably represented less than 10% of its $175 billion deposit base. By professing transparency and regulatory compliance Circle’s USDC stablecoin became an institutional darling. Until recently it was gaining fast on Tether’s USDT.