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Stock impact report

The Fed's Silicon Valley Bank Post-Mortem Explores How Stablecoin Depegs Become Contagious [Yahoo! Finance]

First Citizens BancShares, Inc. - Class A (FCNCA) 
Company Research Source: Yahoo! Finance
When the bank collapsed earlier this year, it triggered a run on USDC that caused the stablecoin to depeg from the dollar. The Fed report explores how the USDC depeg spread contagiously across other stablecoins. The Federal Reserve has published a detailed analysis examining the Silicon Valley Bank (SVB) failure of March 2023 and how it rippled through the stablecoin market. The report highlights how stablecoins that are designed to reliably track the dollar are vulnerable to confidence shocks, contagion, and self-reinforcing withdrawals, just like traditional bank deposits. The Fed's post-mortem recounts how SVB's collapse triggered a swift run not only on the bank itself but also on one of the largest stablecoins, USDC. When Circle disclosed that it could not access uninsured reserves held at SVB, market participants rushed to redeem their USDC for cash. While Circle was able to keep up with redemption requests during normal business hours, panic continued to set in ove Show less Read more
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