Coinbase temporarily pausing USDC:USD conversions over the weekend possibly due to its Circle’s Silicon Valley bank exposure
USDC was one of the most trusted stablecoin and with Circle’s undisclosed exposure puts investors at risk. With no prior warning, Coinbase decided to suspend all of USDC to USD at 10:45PM EST today with one tweet till Monday. This has worried investors and have tremendous concern due to its Cirlce’s exposure to now bankrupt Silicoin Valley Bank. This is discussed more in this content on CNB from few hours ago ” Circle’s USDC Stablecoin’s Cash Reserves at Failed Silicon Valley Bank”
While Coinbase further says there “Your assets remain safe & available for on-chain sends” but we have seen this with multiple ocassions with FTX, Luna, Voyager and many more. Hence till more clarify is provided by Coinbase / Circle, pausing USDT:USD conversion is a point of concern in my opinion.
Coinbase states in Twitter “ We are temporarily pausing USDC:USD conversions over the weekend while banks are closed. During periods of heightened activity, conversions rely on USD transfers from the banks that clear during normal banking hours. When banks open on Monday, we plan to re-commence conversions.“
Coinbase further states that assets are safe and available for on-chain sends.
Just an hour ago, Binance suspended BUSD to USDC conversion . You can read more in details from CNB here “Binance has temporarily suspended auto-conversion of USDC to BUSD – Potentially due to Circle-Silicon Valley Bank exposure”
Binance was considered risky by Coinbase a week ago and announced it plans to suspend BUSD ( Binance USD) on March 13, 2023 for not meeting their listing standards. Now Coinbase themselves are sendinds chills to its investors because of their potential exposure to Silicon Valley Bank.
Conclusion:
With Coinbase taking such extreme measures, investors have to find their ways to protect their asset. At this point it may be too late or Coinbase is trying to save themselves to avoid the bank run, only time will tell the answer. Coinbase claimed they were safe but after what happened with Silicon Valley bank nothing is guaranteed at this point.
Photo by Matt Winkelmeyer/Getty Images for Vanity Fair
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