Stablecoin Assets Have Difficulty With Trust!

Silicon Valley BankIt is a fact that the collapse of . But will the cause of all this turmoil and the ‘contagious effect’ continue to spread?

USDC and Silicon Valley Bank

USDCCircle announced that it had $3.3 billion left in Silicon Valley Bank before its collapse. Circle is grappling with problems causing USDC to drop in value. As a result, some exchanges such as Coinbase and Binance announced that they are suspending certain transactions containing USDC.

However, Circle still has a presence in other banking partners. Most USDC reserves are held in short-term US treasuries and US banks. Despite these challenges, Circle continues to actively work to maintain the stability of USDC.

USDT and the Financial Sector

Tether’s USDT stablecoin is also the subject of discussion due to its relationship with the financial sector. Silvergate Capital With the collapse of banks, such as the bank, investors are concerned about the stability of USDT and other stablecoins, which are often backed by fiat currencies that are held in these banks.

Tether on Twitter that it has no affiliation with Silicon Valley Bank had announced.

USDT initially cryptocurrency It was created to allow investors to use a stable asset for trading and arbitrage purposes without hassle between crypto assets and fiat currencies such as the US dollar.

USDT is audited by one of the largest auditing firms, BDO, and its financial statements prove that most of its reserves are in cash and cash equivalents, including US Treasury bills, money market funds, and cash in banks. The latter represents about 9.66% of Tether’s reserves, or about $6.8 billion, which could meet significant exits.

Stablecoin and Security Measures

Both Circle and Tether stablecointook measures to ensure their safety. Circle’s cash reserves are held at the Bank of New York Mellon, the world’s largest custodian, while Tether’s reserves are held in various cash equivalents.

Stablecoin investors and companies strive to create sound risk management strategies to mitigate potential shocks or disruptions. The stability of the crypto industry is directly tied to the traditional banking system, and as crypto continues to grow and mature, it will be crucial to prepare for and take steps to minimize potential risks.

You can follow the current price action here.


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