While millions of USDC holders are beginning to exchange their USDC stablecoins for other alternatives, led by USDT, investor and fund manager Duffy Wan, Primitive Ventures, is certain that the effects of the Silicon Valley collapse will have a negative impact on the company. Circle” may be an exaggeration.
Where she stated:
There is no need to swap USDC coins for alternative stablecoins or take them for DEFI protocols.
Trading platform operators and owners should not panic.
By its estimates, the losses Circle might incur are not fatal to the fintech heavyweight.
Primarily, it will be covered by short-term US Treasury bonds which make up the lion's share of the USDC support basket.
On Monday, March 13, 2023, when banks open, conversions between USDC and fiat USD will resume, and the 1:1 peg of the stablecoin will come into effect again.
It should be noted that at the time of writing this article, USDC price has already recovered from its collapse to $0.85.
USDC is currently trading at $0.97 on the major spot trading platforms.
Dovey One's suggestions have been echoed by crypto analysts and researchers.
Many of them highlighted that the FDIC system would be able to erase a portion of SVB users' losses.
How much was actually lost from the USDC support basket?
It is still not clear how much money went to good.
Dovey Wan sees the amount as between $0.8 and $1 billion, while an analyst dubbed “DeFi Ignas” is certain that Circle lost about $200 million.
What Wan also said:
US regulators are responsible for the collapse of major cryptocurrency-friendly banks with potential impacts on the global financial ecosystem.
The influence and free fall of the SVB is a huge slap in the face for the Fed and Treasury.
Their decisions destroyed the financial backbone of tech in the United States. However, if the FDIC takes action immediately, the results of this drama may not be as devastating for tech startups and fintech institutions as it seems now.
