Stablecoin Design Choices That Survive a Bank Run
On the evening of March 10, 2023, Circle disclosed that $3.3 billion of the roughly $40 billion in reserves backing USDC remained at Silicon Valley Bank after the bank had been closed by regulators. Within hours, USDC traded as low as about $0.87 on secondary markets. Coinbase and other platforms paused conversions over the weekend while banks were closed. The peg recovered once U.S. authorities guaranteed SVB deposits and Circle resumed...