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Coinbase pauses redemptions of USDC for dollars

The collapse of the Silicon Valley Bank on March 10 led to concerns over the stability of the stablecoin USDC, after it was revealed that a portion (later specified at $3.3 billion) of its cash reserves were kept with SVB. This led to somewhat of a run on USDC, which began wobbling from its dollar peg down to as low as $0.95 on some exchanges.

On the evening of the tenth, Coinbase announced that they would be "temporarily pausing USDC:USD conversions over the weekend while banks are closed," stating that "during periods of heightened activity, conversions rely on USD transfers from the banks that clear during normal banking hours".

"Your assets remain safe & available for on-chain sends," they said: cold comfort for those who are afraid their USDC may not be worth $1 come Monday.

Coinbase is one of the firms behind USDC, and its decision to stop processing redemptions is likely to add to the concern over the stablecoin's... stability.

Theme tags: Contagion
Tech tags: stablecoins