Crisis in Crypto’s Paradise: FIDC’s Intervention Amidst Bank Runs

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  • Binance Grapples with GBP Trades
  • FIDC’s Intercession on Cryptocurrency

Binance Grapples with GBP Trades

Finding a new service provider to manage GBP trades on its trading platform is difficult for Binance; this comes after Skrill Limited said it would shortly quit offering services to the cryptocurrency exchange.

By May 22nd, Skrill will halt receiving GBP payments and withdrawals through bank transfers using cards and Faster Payments Service (FPS). According to a message given to Binance users on March 13th, Binance expressed regret at the GBP fiat partner’s decision to stop providing its services.

As Skrill Limited announced its resignation, Binance is working to find a replacement provider for its users’ GBP on-ramp and off-ramp services.

Given that Skrill’s services would stop in more than two months, the trading exchange promised users that they would try to locate a replacement as soon as feasible. Additionally, Binance claimed that the modification would not affect Binance Accounts or any other goods or services provided by Binance.com.

FIDC’s Intercession on Cryptocurrency

Techteryx, a Singapore-based company, has been informed that they are now unable to mint or redeem the stablecoin. But, through the company’s other financial networks, these services are unaffected.

The TUSD issuer disclosed in December that it keeps its holdings in multiple depository institutions in the Bahamas, Hong Kong, and the U.S. The market capitalization of TrueUSD is a little over $2 billion indicating a 2.52%, with $428 million of that amount held by Binance in reserves.

The stablecoin has moved from its prior position and is now trading at $1.00, according to CoinMarketCap. The problem with Signature Bank impacts Coinbase and Paxos; both businesses allege significant savings saved with alternative banking institutions or independent insurance to safeguard the funds.

Coinbase has claimed it can still use its other banking partners to complete transactions; the business currently has $240 million in cash at Signature Bank.

Paxos has also disclosed that it has deposited in Signature Bank totaling $250 million but asserts that these accounts are further protected by insurance than is offered by the Federal Deposit Insurance Corporation (FDIC).

The market value of all cryptocurrencies has topped $1 trillion once more. Once the Federal Reserve, U.S. Treasury, and FDIC stated that all Silicon Valley Bank and Signature Bank depositors, which were recently shut down, would be permitted to withdraw their assets on Monday, the bitcoin market recovered.

The recent downturn in the cryptocurrency market has stoked doubts about stablecoins’ viability and eroded confidence in USDC and other stablecoins such as USDP and USDD. Although USDC has since rebounded, whether these worries have been completely alleviated is still unclear.

The stablecoin USD Coin was redeemed by cryptocurrency market players on Monday 13th, for about $1.74 billion (>2%) of its circulating quantity, claims Nansen. The statistical figures come after USDC’s creator, Circle Internet Financial, disclosed last week that it had $3.3 billion (8% of reserves) at Silicon Valley Bank, which failed as a result of a run on the bank, leading the stablecoin to lose its peg to the dollar at a 1:1 ratio.

Exchanges, including Coinbase Global Inc. and Binance, temporarily stopped some stablecoin conversions. During the weekend, USDC was mainly used to simplify trading and, as a haven from price volatility, dropped as low as 85 cents. Officials from Circle have yet to respond to inquiries about the redemptions.


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