You may have noticed that Circle’s USD Coin (USDC) stablecoin lost its peg to the US dollar in recent days. That was the result of the problems at Silicon Valley Bank, $ 3.3 billion in Circle capital is tied up in the American bank that threatens to collapse. For that reason, trading firms must now wait until Monday on the processing of their trades in USDC, meaning we’re in for an exciting start to the new week.
Tether benefits again
The problems for USDC in the now gigantic market for stablecoins mean a small victory for Tether (USDT). Since the USDC troubles, USDT’s market capitalization has increased by several billion. Many investors are fleeing to the stablecoin, where it still seems calm at the moment.
Earlier, Tether similarly benefited after the US Securities and Exchange Commission announced that Paxos, the issuer of Binance USD (BUSD), would no longer be allowed to launch any new BUSD tokens.
As a result, we have seen the market value of BUSD slowly drop to zero and that capital is being gobbled up by the competition, with USDT thus appearing to be the big winner. In that respect, it is to be hoped for the industry that Tether has its affairs in order, because there have been quite a few doubts about that in recent years.
More clarity on USDC on Monday
For now, all eyes are on Monday, as we’ll likely know more about the actual health of Circle’s USDC stablecoin by then. On Monday, the Signature Bank Signet network will begin processing transactions again for major trading firms that are currently at a standstill.
Because of all the commotion surrounding USDC, there is so much activity on the Signet network that it is at the max of its capacity. For that reason, there now seems to be a slight delay in processing transactions.
USDC lost its peg to the US dollar after the issues at Silicon Valley Bank came to light. In the moments that followed, the stablecoin fell to a price of $ 0.88, but it has since recovered to $ 0.965. This means that the crypto coin is not quite there yet, but at least the beginning of the recovery has been made.