While 2022 was popular for the downfall of some of the largest cryptocurrency firms, 2023 is proving the same for the banking realm. It all began with the fall of Silvergate Bank, which was followed by the recent Silicon Valley Bank chaos.
It all began when a series of issues surfaced regarding the bank’s struggle to raise capital. This inability slowly turned into an effect when the bank was considering its sale. However, the slew of events has now led to the bank’s closure by California regulators.
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Due to the banking drama and Circle, the stablecoin realm has taken a beating over the weekend. In the midst of all the turmoil, Circle (USDC) has undoubtedly gained attention, though not always for the better. Circle confirmed rumors that it did indeed have $3.3 billion in cash in the Silicon Valley Bank. Following this, several firms, including Robinhood, have taken action.
Also read: Here’s How Circle USDC’s Relationship with Silicon Valley Bank Led to the Current Chaos
Robinhood takes action following USDC chaos
Robinhood has suspended USDC trading and deposits due to increased trading activity caused by the ongoing Circle drama.
The USDC, which is supposed to maintain its peg regardless of market conditions, fell. The stablecoin’s price fell to $0.95, then to $0.90, and is now at $0.9448, representing a 5.51% drop in value in the last 24 hours. According to CoinMarketCap data, the 24-hour trading volume has also increased by 321%.
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Other exchanges, including Coinbase and Binance, also took temporary measures amidst the ongoing issues.