Altcoins
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Cryptocurrency exchange Coinbase has reportedly offered Circle, the cryptocurrency company that issues the USD Coin (USDC) stablecoin, a $3 billion line of credit to bring the stablecoin back to its $1 peg.
This came after the USDC lost its peg to the US dollar due to Circle’s $3.3 billion injection into the bankrupt Silicon Valley Bank, which was taken over by the Federal Deposit Insurance Corporation (FDIC).
Coinbase Offers $3 Billion Safety Net to Circle to Support USDC
Coinbase Offers $3 Billion Safety Net to Circle to Support USDC
According to reports, Circle requested an emergency credit line to ensure USDC stability, and Coinbase provided a credit line that would cover all the blocked liquidity of USDC reserves and would allow USDC stablecoin parity with the US dollar after the bankruptcy of Silicon Valley Bank.
USDC pulled out of the dollar after Circle failed to withdraw its deposits from Silicon Valley Bank as the bank was ordered by the regulator to stop paying out.
This caused a lot of fear, uncertainty and doubt (FUD) among investors who rushed to withdraw their funds from the stablecoin, causing it to decouple from the US dollar and trade below $0.90.
As of now, the USDC price has returned to its $1 peg with a market capitalization of $35 billion.
Coinbase Plans to Open Offshore Unit Amid US Regulatory Review
Coinbase Plans to Open Offshore Unit Amid US Regulatory Review
On March 17, it became known that Coinbase may create an offshore division due to increasing scrutiny from regulators in the United States. The report suggests that global transactions will go through the new facility, but this has yet to be officially confirmed by Coinbase.
While Coinbase has yet to confirm the news, the company’s COO Emily Choi mentioned during the earnings call that “international expansion will continue to be a core part of our work.”
Choi expressed his approval of the recent legal changes in Europe and the UK and revealed that Coinbase plans to continue investing in these jurisdictions.
The exchange recently praised the UK for launching consultations on a new future financial services regulatory regime for crypto assets, indicating its continued investment in supporting countries.
Author: CryptoMan, analyst Freedman Сlub Crypto News
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