FSB warns fully backed stablecoins can still break the peg
- —FSB: reserves in T-bills and bank deposits settle only during US banking hours
- —In March 2023 USDC fell to ~$0.87 as $3.3B of reserves sat at SVB
- —US Treasury yields are at multi-decade highs and the KBW bank index fell ~12% in two months
- —Retail holders cannot redeem stablecoins for $1 directly with the issuer
Why it matters: Stablecoins are the crypto market's main settlement asset; a depeg would hit liquidity across all trading pairs.
Source: Siam Blockchain