BREAKING OVERNIGHT: Crypto ‘StableCoin’ USDC ‘Breaks The E-Buck’ Dropping below $1 as its Assets are Locked Up in SVB Collapse
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Image credit: 6:32AM 3/11/23 https://www.calebandbrown.com/
By Stan Szymanski
Many thanks to Bix Weir for his email alert to his ‘Public Road’ subscribers today concerning aspects of this matter and inspiring this writing.
Silicon Valley Bank (SVB) collapsed and was put into receivership by the FDIC late this week. SVB was the 16th largest bank in the United States. This means that the collapse is not only horrible for SVB but is perhaps more importantly a huge problem for its customers.
For instance, internet content provider Roku was impacted according the ABC News:
…’Internet TV provider Roku was among casualties of the bank collapse. It said in a regulatory filing Friday that about 26% of its cash — $487 million — was deposited at Silicon Valley Bank. …Roku said its deposits with SVB were largely uninsured and it didn’t know “to what extent” it would be able to recover them.’…(ABC News)
Of a potentially much larger concern is the contagion in banking and its connection to cryptocurrencies. Earlier in the week Silvergate bank collapsed. Silvergate was a darling of the crypto community. Starting in earnest with the collapse of Sam Bankman-Frieds’ cataclysmic destruction of FTX in late 2022, the cratering of the crypto market and confidence in it has proved to be valid.
After Silvergate fell, SVB followed suit.
Because of the catastrophe at SVB this is cascading mightily into the business existence of its customers.
Of particular note is SVB’s patron, Circle and its ‘StableCoin’ USDC.
In a message from support at cryptocurrency broker Caleb & Brown we see:
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…’SVB (different from Silvergate) happens to be 1 of the 6 banks that hold collectively 25% of Circle’s reserves. As Circle has not yet clarified the exact percentage of exposure, the potential range is UP TO 25%, but unlikely to be the whole amount.’… (thanks to Bix Weir for sharing this info via his email update to his “Public Road” Update subscribers)
So a portion of the reserves of Circle’s USDC StableCoin are now tied up in the receivership by the FDIC of SVP. That means that for the time that the FDIC holds those assets during the time of receivership, the issuance of USDC is not backed 1-to-1 with dollar denominated assets. A portion of USDC is now backed by -nothing-.
As of this morning at 6:31AM E.S.T. USDC has lost its peg to $1.00 and was trading at $.92
So we see that we now have holder of a major ‘StableCoin’ taking losses on an asset that was supposed to have a ‘stable’ value of $1.00.
Ladies and Gentlemen, we now live in a world where crypto failures are crashing banks (FTX crashing Silvergate) and where bank failures are crashing cryptocurrencies (SVP failure crashing Circle’s USDC).
What will be safe as we see the clear cut corruption of the financial system in the west manifest in these banking and cryptocurrency institutions? Wouldn’t your money be better off (this is not financial advice; consult a financial professional) in tangible items such as: food, water (and a way to purify and store it), shelter (preferably away from a major city), energy (perhaps solar) and protection (at the least be where everyone isn’t)? The consideration of precious metals is something you may want to pay particular attention to at this time (Steve Quayle, Bill Holter and Mike Maloney are a few names to look into to help you-(this is not financial advice).
In these times we also need to ask God for wisdom. Find out about Jesus and trust Him as Lord and Savior. Read the Gospel of John to get started and find out if Jesus is who He said He is. Unlike assets in SVB, If you are The Lord’s no one can take that away from you.
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Stan Szymanski (or Encouraging Angels) is not a medical doctor. This is not medical advice. In all matters pertaining to the health and care of a human being consult a medical doctor. This is not legal, financial or personal advice. Consult appropriate professionals in those fields for that type of advice.