The depositing and trading of USDC have been suspended by Robinhood, a platform that offers commission-free trading of various commodities via a mobile app, including cryptocurrencies.
According to reports from Mar. 11, the trading platform has temporarily stopped accepting deposits and trading of USDC. The stablecoin has de-pegged from the dollar and is currently under threat.
— Barchart (@Barchart) March 11, 2023
The withdrawal of USDC is still possible, according to Robinhood.
Trackers suggest that USDC is trading at $0.96 vs. the USD, rebounding after plummeting to as low as $0.84 in prior sessions. Holders of tokens are switching to fiat currencies and alternative stablecoins, such as the USDT.
Holders of USDC on Coinbase and Binance must wait until March 13 to exchange their holdings for fiat currency or BUSD. Because of “heightened market activity,” according to Coinbase, they depend on bank transactions that clear within regular work hours. On the other side, Binance stated that they are monitoring the issue.
Binance has temporarily suspended auto-conversion of USDC to BUSD due to current market conditions, specifically related to high inflows & the increasing burden to support the conversion.
This is a normal risk-management procedural step to take while we monitor the situation.
— Binance (@binance) March 11, 2023
The trading and direct deposit of 17 cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC), are now supported by Robinhood. The sole stablecoin listed on the exchange is USDC.
In September 2022, Robinhood and Circle teamed up to allow the exchange’s users to deposit and trade the stablecoin.
Although they allegedly stopped accepting deposits and trading USDC, Robinhood has not yet taken the stablecoin off its exchange.
When USDC is under a lot of strain and users are running for the doors, this might be seen as a vote of confidence.
1/ Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB.
— Circle (@circle) March 11, 2023
The bank was then put under the supervision of the United States Federal Deposit Insurance Corporation by California authorities (FDIC). The organization will liquidate the tech lender’s assets as receivers to satisfy creditors and depositors.
The $3.3 billion that is still in SVB might go to Circle, but there will be a loss of almost $200 million. However, the money might be made up with interest payments from their exposure to US Treasury securities. The USDC is backed by Circle’s reserves, which are mostly comprised of short-term US government bonds.