The State of USDC: Panic, but Not Hopeless

03/11/2023 10:33 • Digital Disruptors • 95 views

On March 11, DeFi researcher Ignas said in a message that USDC seemed to be in a state of panic but would not return to zero as UST did. Circle had clarified the amount of cash it held. Now only 8.2% (US $3.3 billion of US $40 billion) were trapped in Silicon Valley banks, but that did not mean that the money was gone. If the expected expenditure of the Federal Deposit Insurance Corporation of the United States was 94%, The loss of Circle may only be $198 million (the entity can immediately obtain 62% of the balance payment and recover 94% of the funds through the final payment under the “prepayment dividend” process of the Federal Deposit Insurance Corporation of the United States).

Viewpoint: USDC will not return to zero like UST, and Circle’s loss may only be 198 million dollars

Analysis based on this information:

In the world of decentralized finance (DeFi) and cryptocurrency, USDC has been one of the most reliable stablecoins in the market. However, recent events have created some panic among investors and users of USDC. On March 11, DeFi researcher Ignas expressed his concerns about the state of USDC, stating that it seemed to be in a state of panic. Despite this, Ignas believed that USDC would not return to zero, unlike UST, another stablecoin that experienced significant losses.

Circle, the company behind USDC, has been under scrutiny for its financial stability. In response, Circle released a statement clarifying the amount of cash it held. According to the statement, only 8.2% of its funds (US $3.3 billion of US $40 billion) were trapped in Silicon Valley banks. However, the fact that some of the funds were trapped in banks did not necessarily mean that the money was lost.

The expected expenditure of the Federal Deposit Insurance Corporation of the United States was 94%. This means that Circle’s losses may only amount to $198 million. The company can recover 94% of the funds it lost through the final payment under the “prepayment dividend” process of the Federal Deposit Insurance Corporation of the United States. Furthermore, the company can immediately obtain 62% of the balance payment, which would provide some relief to investors.

In conclusion, the recent panic surrounding USDC may have been unwarranted. Circle’s statement about its cash reserves and the support provided by the Federal Deposit Insurance Corporation of the United States should help restore investor confidence in USDC. While the stablecoin market can be unpredictable, this recent incident serves as a reminder of the importance of transparency and regulatory compliance in the cryptocurrency industry.

Overall, the message suggests that USDC is not a lost cause and that the company behind it is taking steps to address the situation. Nevertheless, the incident highlights the potential risks of investing in stablecoins and the importance of due diligence in the cryptocurrency market.

Keywords like Federal Deposit Insurance, DeFi researcher, and Silicon Valley banks highlight the regulatory, research-based, and geographic aspects of the message. These keywords also underscore the importance of transparency, compliance, and risk mitigation in the realm of cryptocurrency and decentralized finance.

This article and pictures are from the Internet and do not represent aiwaka's position. If you infringe, please contact us to delete:https://www.aiwaka.com/2023/03/11/the-state-of-usdc-panic-but-not-hopeless/

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.

The State of USDC: Panic, but Not Hopeless

Viewpoint: USDC will not return to zero like UST, and Circle’s loss may only be 198 million dollars

Recommended articles