Binance and Coinbase Have Stopped These Altcoin Transactions!

Binance announced that it has temporarily suspended automatic conversion of USDC to BUSD due to market conditions. Coinbase has also stopped exchanging the USD pair for USDC. Here are the details…

Binance suspends some USDC transactions

Binance, the world’s largest cryptocurrency exchange by daily trading volume, has suspended USDC/BUSD conversions. The exchange stated in a tweet that the decision was made in response to high entries and increased load to support the conversion. The move is a standard risk management procedure and Binance will continue to monitor the situation. The announcement comes after USDC, a stablecoin pegged to the US dollar, fell 0.8 percent in 24 hours, as we reported on Cryptokoin.com.

The drop was attributed to the bankruptcy of Silicon Valley Bank (SVB), one of six banking partners used by Circle to manage USDC’s cash reserves. While Circle has not disclosed the exact amount of reserves in SVB, the impact of the bank’s distress was felt by USDC, leading to a significant drop in USDC/USDT trading pair on OKX to $0.973 while BUSD/USDT trading pair on Binance dropped to $0.9873. There has also been a significant USDC outflow from central exchanges in the past 24 hours. Wallets holding USDC have withdrawn a total of $68 million from exchanges, while funds and market makers such as Genesis Trading, Wintermute, and Jump Trading have also drawn approximately $79 million worth of USDC.

Coinbase suspends USDC/USD transactions

On the other hand, Coinbase, one of the leading cryptocurrency exchanges, announced a temporary pause in USDC/USD conversions over the weekend as banks are closed. Coinbase and Circle are the two founding members of the Centre, and Circle plays a particularly important role in the development of USDC. According to a tweet from the exchange, conversions are based on banks’ USD transfers during normal banking hours, and such transfers may be delayed during times of increased activity such as the current market turmoil. Coinbase has assured its users that their assets are safe.

This move by Coinbase came in response to current market conditions that have been particularly volatile over the past few days. While the cryptocurrency market is experiencing a sell-off, many investors are rushing to liquidate their positions, resulting in an increase in trading activity. This strained the banking system, making it difficult for exchanges to process transactions on time. Coinbase’s decision to pause USDC/USD conversions over the weekend is seen as a standard risk management procedure, and the exchange says it plans to resume conversions when banks open on Monday.

Overall, approximately $920 million USDC has been withdrawn from central exchanges in the last 24 hours, and a total of $30 billion worth of USDC has been withdrawn from exchanges in the past seven days. The news highlights the challenges faced by stablecoins designed to maintain a stable value relative to a particular asset or basket of assets. Stablecoins have become popular in recent years as a way to facilitate cryptocurrency trading and provide a hedge against market volatility. However, recent events with USDC have raised questions about the stability of these coins and reserve assets.