Coinbase Halts Conversion Between USDC And US Dollar As Banking Crisis Rolls Into Crypto

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Coinbase (COIN) hit the brakes on conversions between the USDC stablecoin and the US dollar late Friday, as the collapse Silicon Valley Bank (SIVB) spread to the heart of crypto trading.

In a tweet, the crypto said it is “temporarily pausing” conversions while banks are closed over the weekend. The exchange said it plans to resume conversions on Monday.

The halving speaks to the chaos that has befallen the crypto industry’s second largest stablecoin in the wake the demise of the Silicon Valley bank on Friday. Speculating on USDC’s stability, traders redeemed $1.6 billion of USDC, reducing its total supply.

late in the day, Circle confirms $3.3B Its stablecoin was backed by $40B on deposits at the now-shuttered lender. The fate that cash is now uncertain, with Silicon Valley Bank seized by the FDIC, and USDC — for the time being — lost my dollar peg,

“Circle is currently protecting USDC from a black swan failure in the US banking system,” Tweeted Circle Chief Strategy Officer Dante Disparte late Friday night. “Silicon Valley Bank is a vital bank in the US economy and its failure – without a federal rescue plan – would have wide-ranging implications for business, banking and entrepreneurs.”

“During periods increased activity, conversions rely on USD transfers from banks that clear during normal banking hours,” Coinbase said in its tweet announcing the conversion break. “When the banks open on Monday, we plan to resume conversions.”

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