Circle Stablecoin’s Wild Weekend Raises Risk of Regulatory Scrutiny
- USD Coin fell below crucial $1 threshold after SVB collapse
- Regulators have been increasingly scrutinizing stablecoins
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Circle’s stablecoin needed about 36 hours to repair its peg with the dollar amid a liquidity panic. Fixing its reputation with regulators will take longer.
Market overseers, their hands already full with the biggest US bank failure in a decade, were forced over the weekend to contend with a drama playing out in a section of finance that has been trying their patience for months: crypto. That’s where USD Coin’s supposedly immutable bond with the dollar came asunder, when it was revealed about 8% of the reserves backing it were stuck at the collapsed lender.