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USDC Stablecoin in Panic but not Doomed

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On March 11, DeFi researcher Ignas said in a message that USDC seemed to be in a state of panic but would not return to zero as UST did. Circle had clarified th

USDC Stablecoin in Panic but not Doomed

On March 11, DeFi researcher Ignas said in a message that USDC seemed to be in a state of panic but would not return to zero as UST did. Circle had clarified the amount of cash it held. Now only 8.2% (US $3.3 billion of US $40 billion) were trapped in Silicon Valley banks, but that did not mean that the money was gone. If the expected expenditure of the Federal Deposit Insurance Corporation of the United States was 94%, The loss of Circle may only be $198 million (the entity can immediately obtain 62% of the balance payment and recover 94% of the funds through the final payment under the “prepayment dividend” process of the Federal Deposit Insurance Corporation of the United States).

Viewpoint: USDC will not return to zero like UST, and Circle’s loss may only be 198 million dollars

Analysis based on this information:


DeFi researcher, Ignas, recently gave his interpretation of the current state of the stablecoin USDC. According to his message on March 11th, while USDC is currently in a state of panic, it will not suffer the same fate as UST (the stablecoin for Terra) and return to zero.

Ignas further explains that Circle, the company behind USDC, has clarified the amount of cash it holds. At present, only 8.2% of the total amount, which is $3.3 billion out of $40 billion, is trapped in Silicon Valley banks. However, this does not necessarily mean that the money is lost.

If the expected expenditure of the Federal Deposit Insurance Corporation (FDIC) of the United States is 94%, Circle’s losses may only amount to $198 million. The company can immediately obtain 62% of the balance payment and subsequently recover 94% of the funds through the final payment under the “prepayment dividend” process initiated by FDIC.

The message implies that while USDC may be going through a panic phase, it is not doomed to fail. Circle has not suffered a significant loss, and it has taken corrective actions to protect its users and investors. The FDIC’s “prepayment dividend” process ensures that in case of bank failures, insured funds are quickly recovered by depositors.

In conclusion, the message indicates that although USDC is in a state of panic, it is still a reliable stablecoin, and Circle is taking steps to protect its users and investors. The FDIC’s presence in the banking industry provides a safety net for depositors, which Circle has taken advantage of to protect its trapped funds.

Keywords such as USDC, panic, stablecoin, Circle, and FDIC summarize the message’s core content, which is a positive and reassuring interpretation of the current state of USDC.

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