USDC depegs as Circle confirms $3.3B stuck with Silicon Valley Bank
Circle’s USDC stablecoin, the second-largest stablecoin at $42 billion of market cap, depegged from the USD, trading as low as $0.88 on Coinbase this morning (March 11, 2023). This followed Circle’s announcement that $3.3 billion of USDC’s reserves were held at Silicon Valley Bank (SVB) which was shut down yesterday by the California Department of Financial Protection and Innovation and taken over by the Federal Deposit Insurance Corporation (FDIC). Also, Coinbase announced that USDC redemptions would be temporarily suspended. [Read more at CoinDesk]
Silicon Valley Bank is a very American mess
An FT Alphaville analysis suggests that SVB exploited a regulatory loophole to run the egregiously mismatched balance sheet that ultimately led to its demise. Regulations put in place after the 2007-08 Great Financial Crisis meant to curb such mismatches (the liquidity coverage and net stable funding ratios) only apply to banks that rely on short-term wholesale funding, whereas SVB’s liabilities were mostly corporate customer deposits. (Bloomberg’s Matt Levine has also done a nice SVB post-mortem.) [Read more at FT Alphaville]
SEC denies VanEck spot BTC trust product, commissioners see double standard
The US Securities and Exchange Commission (SEC) has denied another spot Bitcoin exchange-traded product proposal, this time a Bitcoin trust application from VanEck. There have been almost 20 such unsuccessful applications over the last six years. VanEck applied to launch a spot Bitcoin exchange-traded fund (ETF) in 2017 but withdrew it after facing resistance from the SEC. Then it filed applications in November 2021 and June 2022, both rejected the same reasons as all other similar rejections, over SEC concerns of manipulation in the underlying market. [Read more at CoinTelegraph]
Upcoming conferences, webinars and speaking engagements:
- I’ll be providing an introduction to global CBDC developments (virtually) to a panel at the March 15 Digital Euro Association (DEA) Digital Money Academy with Ruslan Konurbayev National Bank of Kazakhstan) , and Péter Fáykiss (Maygar Nemzeti Bank). [Register here]
- I’ll be on a “public finance and the digital future” panel at the March 23-25 Willamette College of Law “Our Money, Our Future” (Hybrid) Conference in Salem, Oregon on March 24. [Register here]
- I’ll be moderating the “CBDCs, Stablecoins, Commercial Bank Money Tokens – What is the Future of Money?” panel discussion at the Digital Euro Association (DEA) Digital Euro Conference on March 31 in Frankfurt. [Register with this link and the DECKIFFMEISTER20 code and get a 20% discount]
- I’ll be moderating a panel on “what happens when the lights go out…different schemes for offline functionality” at the in-person Digital Currency Conference (DCC) in Mexico City on May 18. [Register here]
Kiffmeister’s global central bank digital currency monthly monitor
Just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So for any of you out there who work for a central bank, ministry of finance or international financial institution who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at chronicles@kiffmeister.com.
The Sovereign Official Digital Association (SODA) is a technology-agnostic firm offering advisory services at the intersection of central banking, digital finance and the web3 industry, aiming to make public digital money a reality. SODA believes institutions in the existing financial ecosystem should have access to the tools and resources they need to move from discussion to action. SODA offers ‘real life’ use cases to help test digital money and drive adoption as central banks and other public institutions explore the future of a more financially inclusive world powered by interoperable blockchain-based networks. SODA would love you to join us on this journey – please get in touch (chris@sodapublicmoney.org).
Satoshi Capital Advisors is a New York-based, global advisory firm that works with central banks, governments, and the private sector to architect, implement, and operate varying initiatives. Satoshi Capital Advisors’ central bank work revolves around CBDC architecture and implementation, providing advisory services from research phase through to growth phase. Utilizing a product-market fit and technology agnostic approach to CBDC architecture and implementation enables Satoshi Capital Advisors to build tailored solutions, bespoke to local financial system nuances. Satoshi Capital Advisors welcomes requests from central bank officials for virtual and in-person CBDC workshops. [Click here for more information]
WhisperCash offers the first fully offline digital currency platform that has the same properties as physical cash. It can perform secure consecutive offline payments without compromising on security, privacy or accessibility. WhisperCash allows direct person to person offline payments without any server infrastructure or internet connectivity. It comes in various form factors including the self-contained credit card-sized “Pro” that sports an eInk screen and capacitive keyboard, and lasts for two weeks between recharges assuming a few transactions per day. [Click here for more information]
