A week after [Signature Bank closed](/news/article/why-signature-bank-fell-so-fast), Flagstar Bank, a New York Community Bank subsidiary, has agreed to purchase a huge chunk of the failed institution in a $2.7 billion deal.

According to the Federal Deposit Insurance Corporation (FDIC), all of Signature Bank's 40 branches will operate as Flagstar Bank beginning Monday. Customers won't need to make any changes to conduct business with the new bank. 

## Flagstar bid excluded $4 billion crypto deposits

FDIC's 19 March [press statement](https://www.fdic.gov/news/press-releases/2023/pr23021.html) didn’t address the fate of the much larger [Silicon Valley Bank](/news/article/silicon-valley-bank-uk-to-be-bought-by-hsbc) (SVB) that the regulator took over two days before taking over Signature Bank.

The takeover deal includes purchasing Signature Bank's assets worth $38.4bn. SVB had $209 billion in assets compared to Signature Bank's $110.36 billion.

Per the announcement, the Flagstar takeover bid, which includes a $60 billion loan portfolio, excluded $4 billion associated with Signature's crypto banking business. Accordingly, crypto deposits will remain with the agency in receivership, and FDIC will provide [them directly to the customers](https://twitter.com/nic__carter/status/1637609420929597440) concerned.

The shutting down of Signature Bank came hot on the heels of the fall of the crypto-friendly [Silvergate Capital](/news/article/silvergate-bank-crisis-sees-crypto-tank) earlier in March and the 12 March closure of SVB, which previously caused [Circle’s](/news/article/circle-usdc) USDC to stumble and lose its peg to the US dollar. Commenting during a previous press interview, Circle's Chief Strategy Officer [Dante Disparte](https://forkast.news/video-audio/circles-disparte-crypto-banking-risks/) opined that the ongoing fallout was a stress test for traditional finance and emerging cryptocurrencies, presenting an opportunity for them to "weather the storm side by side".

## Traditional banks introducing risk to the crypto space

The unwillingness of Flagstar Bank to take over all of Signature Bank's assets, including the crypto-related ones, indicates that banks are becoming wary of taking on risk due to the spreading banking crisis.

The ongoing banking failures demonstrate that, contrary to what everyone else might have thought, traditional banks are now introducing risk to the crypto space. The current state of affairs is the opposite of the "travel risk" regulators routinely offered to would-be crypto investors on the risk that crypto would introduce to banking.

The back-to-back failure of Silicon Valley Bank and Signature sparked a nationwide fear that it could kick off a more significant crisis of confidence within the US banking system.

FDIC is looking to step in and save the situation by brokering sales to pay back the failed banks' depositors to more vital financial institutions.


Flagstar to Buy Signature's Non-Crypto Assets 

On Friday, USDC stablecoin de-pegged from its intended $1 price after [Silicon Valley Bank](/news/article/silicon-valley-bank-uk-to-be-bought-by-hsbc) (SVB) was closed by regulators. In a [blog post](https://www.circle.com/blog/an-update-on-usdc-and-silicon-valley-bank), Circle said it would use its corporate resources and external capital, if required, to back USDC.

Circle had been holding $3.3 billion in USDC cash reserve at the Silicon Valley bank when the FDIC seized the bank's assets on Friday.

The company stated that it had attempted to transfer its assets before the bank's collapse and that the transaction could settle on Monday when US banks would resume normal operations.

However, Circle acknowledged the possibility that SVB might not return 100% of its assets, and it may take some time for any return, as the FDIC issues IOUs and advanced dividends to deposit holders.

According to Coingecko, the USDC price fell as low as $0.88 before rebounding to $0.97 after the announcement.

## DEX witnessed ATH in trading volumes

As a result of USDC price de-pegging from $1, crypto firms such as Binance, [Crypto.com](/news/article/crypto.com-ceo-past-includes-bankruptcy), Coinbase, and Bitpay paused USDC transactions and auto conversions. However, despite crypto companies halting transactions, the stablecoin accounted for 29% of the $90.70B global crypto trades.

Over the weekend, decentralized exchanges (DEX) [Uniswap and Curve witnessed a surge in trading volumes](https://www.coindesk.com/markets/2023/03/13/usdc-trading-dominates-record-day-for-defi-exchanges-uniswap-curve/), hitting all-time highs, as traders rushed to exchange their token holdings, particularly USD coin, with other tokens.

Uniswap processed nearly $12 billion in trading volume over 24 hours from Saturday to Sunday.

According to Dune Analytics data, USDC pools for wrapped Ether (WETH), Tether (USDT), and Dai (DAI) generated $15 billion in volume over seven days. The majority of this occurred from Friday to Sunday, generating over $8 million in fees for the Uniswap protocol, adding to Uniswap Labs' revenue, with a smaller percentage paid to liquidity providers.

Furthermore, stablecoin swapping tool Curve recorded almost $8 billion in trading volume, with one of its popular pools being imbalanced due to the rush of traders exchanging USDC for other tokens.


USDC Price De-pegged Below $1 

Yaya Fanusie, a cryptocurrency researcher and former CIA analyst, believes the slow start on US CBDC ([Central Bank Digital Currency](/news/article/uk-sought-cbdc-head)) development could lead to a loss of control over the global financial system. 

Fanusie, currently the policy head at the Crypto Council for Innovation, noted in a Bloomberg interview on 28 February that sanctioned states seek to transact on financial infrastructure that isn't heavily influenced by the US to move funds more freely across borders.

Further, he suggests that if the US [CBDC adoption](/news/article/central-bank-of-kazakhstan) continues to lag, it may result in unforeseen geopolitical implications and trouble over time. According to him, the state-issued central bank digital currencies could be a crucial element in the global adoption of such infrastructure. He also warned that the US could lose its influence over developing new standards in this area, negatively impacting its economic statecraft.

However, the US Federal Reserve has recently made progress in the US CBDC project, known as the [Digital Dollar Project](https://digitaldollarproject.org/wp-content/uploads/2023/01/Digital-Dollar-Project-White-Paper-2.0_2023.pdf), with the release of its latest whitepaper on 18 January. Nevertheless, the Federal Reserve has yet to receive approval from the US government to move forward with this project.

## China's advantage on early adoption of CBDC  

Fanusie, in the [Bloomberg interview](https://www.youtube.com/watch?v=BCRvX9s7xMA), noted China's advantage in the early adoption of CBDC since 2014 and the launch of the pilot version of its digital yuan (e-CNY) on 4 January, 2022. According to him, the e-CNY has already processed millions of transactions across millions of wallets.

Further, he added that an array of pilots are currently testing smart contracts to introduce programmability into CBDCs. Additionally, China is assisting other nations in adopting similar standards and collaborating for their CBDC to CBDC transactions. Fanusie noted that countries might have an unspoken "race" to gain a geopolitical advantage in the CBDC realm.

## Opponents' viewpoint

Some critics of central bank digital currencies believe governments leverage blockchain-backed CBDCs to retain financial oversight over their populace.

One such instance of this resistance occurred in the United States, where Congressman Tom Emmer, an advocate of cryptocurrency, put forward the CBDC Anti-Surveillance State Act to safeguard the financial confidentiality of American citizens against potential intervention by the Federal Reserve.


red image of US building and crypto coins

Delayed US CBDC Adoption Could Spell Trouble 

Before we examine USDC vs USDT, we need to understand what stablecoins are and how they operate.

Every cryptocurrency token has a level of volatility, from Bitcoin to Shiba Inu. Cryptocurrencies are susceptible to both exhilarating price increases and sudden, precipitous declines in the same way that traditional assets are.

Stablecoins have emerged as a reliable method for investors to keep their money in the cryptocurrency ecosystem despite the wild price swings that have been occurring recently.

Stablecoins, coins pegged to a real-world asset, most commonly a fiat currency, offer protection against the price volatility to which other coins are prone. Both USD Coin (USDC) and Tether (USDT), pegged to the US dollar, have emerged as the most prominent stablecoins.

They have maintained their position at the forefront of the market and can be found in the most important cryptocurrency exchanges, wallets, and applications. It is helpful to have an understanding of how each stablecoin operates before making a decision regarding which one is the most suitable for your requirements.

#What are stablecoins

A cryptocurrency whose value is backed by an external asset, such as the US dollar, is known as a stablecoin. For a significant portion of their early existence, Bitcoin and other early cryptocurrencies could only be traded for other cryptos or traditional currencies.

If you wanted to trade your coins for something else, there was no mechanism for holders of cryptocurrencies to switch to a fiat-backed asset without first leaving the ecosystem of cryptocurrencies entirely. Stablecoins are what made this possible in the first place. 

Stablecoins [are utilized by many crypto traders](https://www.moonpay.com/learn/cryptocurrency/what-is-the-difference-between-usdt-and-usdc) so that they may continue to participate in the ecosystem by keeping an asset that maintains its value. You may swap them whenever you want, 24 hours a day, without going to your bank to withdraw cash first.

Bitcoin was designed to be less volatile than other digital currencies. As long as the backing ratio is accurate, the value of these tokens will never change and will always remain the same.

#Why are so many stablecoins pegged to the USD?

The most widely used stablecoins in circulation today are USDT and USDC, with market capitalizations in the multi-billion dollar range. However, they are not the only ones doing this.

Binance has its stablecoin, known as BUSD, and Dai, also known as DAI, is a cryptocurrency built on Ethereum and developed to operate only on those networks. Both of these coins will always be worth $1, just like USDC vs USDT, but it does not mean they are interchangeable. The coin you choose to buy will depend on the blockchain and applications with which you intend to engage.

In 2014, Tether Limited of Hong Kong became the first company to produce USDT to bridge the gap between cryptocurrencies and fiat currencies. Tether provided users with access, for the very first time, to a platform-agnostic, blockchain-based US dollar that held many of the technical advantages of Bitcoin, Ethereum, and other crypto assets, including their high liquidity but none of their volatility.

This was made possible by Tether's use of the Ethereum blockchain. Tether has built a permissionless mechanism to send crypto-dollars to anyone with speed, transparency, and a low cost. This opens up the use case of cryptocurrencies to include remittances, payments, and more. Tether has accomplished this by tapping into the best of both worlds.

As soon as it was made available to the public, hundreds of cryptocurrency trading pairs began listing against USDT, providing the token with an early mover advantage in the market for stablecoins. There are 74.7 billion USDT tokens circulating across the most important blockchains, including Bitcoin, Ethereum, EOS, Algorand, Tron, and many more.

It is possible to buy or trade for hundreds of different cryptocurrencies using USDT on cryptocurrency exchanges, making it the most popular trading pair in the crypto market. Anyone can use USDT to conduct transactions that are not only inexpensive but also speedy, and they can earn interest on decentralized financial protocols.

It also provides a method for businesses to accept cryptocurrency payments denominated in fiat money, allowing them to do so without assuming the market risk typically associated with accepting payments in the form of more volatile cryptocurrencies.

USDT has maintained a position among the top five cryptocurrencies regarding market capitalization and trade volume, frequently surpassing the daily trades conducted in Bitcoin.

## Stability of the USDC vs USDT

Because of how USDT was developed, its dollar value will almost always remain constant at $1. Although there is a remote possibility that the price could shift by a few cents here and there, the market tends to quickly correct itself to back to its original $1 price point.

Coinbase and Circle collaborated in 2018 to create the stable cryptocurrency USDC. Its price, pegged at $1 and not adjusted, is the same as that of USDT and any other token backed by USD. The Centre Consortium oversees the technical and financial standards for the stablecoin and ensures transparency surrounding a true 1-to-1 backing.

The Centre Consortium is also in charge of the governance of the coin. This indicates that $1 and other cash equivalents are kept in reserve for every created USDC.

A supply of 34.6 billion USDC is circulating, while an equal monetary amount is held in reserve. To facilitate the expansion of the USDC ecosystem, Circle has made it possible for Circle's licensed and regulated financial institutions to become Circle members and issue USDC tokens. 
You may buy or trade USDC on [virtually all leading cryptocurrency exchanges and providers](/news/article/crypto-exchange-gemini-cuts-staff). Similar to USDT, USD Coin can be sent and received by any wallet or exchange compatible with the ERC-20 standard used by Ethereum.

USDC vs USDT: Understanding the Stablecoins

After seeing an impressive rise following the collapse of [Terra](/news/article/terra-luna-classic) in May, Circle's dollar-pegged USDC coin has experienced a massive downfall.

The market capitalisation of Circle's [USDC coin has plummeted sharply](https://cryptopotato.com/usdc-lost-20-of-its-market-capitalization-in-the-last-30-days/) since the Tornado Cash scandal.

The stablecoin appears to have lost market share to rivals such as [Binance](/news/article/binance-hack) USD (BUSD), the world's third-largest stablecoin, and Tether. Since early July, the BUSD market value has increased by 21% to $21.66 billion. Tether has risen by 3% to $68.3 billion.

USDC dropped nearly 20% of its market capitalisation last month, falling from $53.3 billion to just below $43.9 billion. Almost $5 billion of stablecoin was withdrawn in a single day (26 September), depicting a loss of roughly 9.2% of its total capitalisation.

## The effects of freezing cash-linked Tornado addresses

Although the coin started to lose popularity in July, the action to freeze more than 75,000 circle coins of funds associated with 44 [Tornado Cash](/news/article/tornado-cash) addresses was a turning point that led to backlash and a wave of withdrawals.

Even MakerDAO, which had a significant portion of its reserves backed in USDC, viewed Circle's actions as a breach of privacy rights. The project began to discuss abandoning its reliance on the coin, arguing that given the extreme level of centralisation the coin has by nature, it could face the same consequences as the wallets connected to Tornado Cash at any time.

Even though it appeared MakerDAO was turning against the coin, they announced yesterday that a new plan to deposit USDC on Coinbase's institutional custody platform had been approved. They will escrow up to $1.6 billion in USDC reserves on Coinbase Prime to earn 1.5% in rewards. 

Therefore, even the coin capitalisation keeps declining, significant projects still place bets on its potential for future recovery.

## Bottom line

Although the current outlook for [USDC](/news/article/circle-usdc) is not promising, the project will likely maintain its position among the top five cryptocurrencies. However, they must regain the trust of some major exchanges and projects in the crypto community, and the compliance card may entice more players to join their ranks.


USDC coin loses 20% of market capitalisation

The stablecoin, [Circle USDC](/coins/usdc), has [reported](https://www.circle.com/en/pressroom/circle-announces-next-wave-of-usdc-support-for-multi-chain-ecosystem) that it will be adding five new blockchains to its support network. [Circle Internet Financial](https://www.circle.com/en/) has taken the step to become a better multichain ecosystem. It plans to expand support to the [Polkadot](/news/tag/polkadot/2), Cosmos, Optimism, NEAR, and Arbitrum One networks. 

The firm first announced this on Wednesday at the Converge22 conference. Other than the [Cosmos network](/news/article/cosmos-crypto-explained), the stablecoin will be natively available on all others by the end of this year. Meanwhile, on the Cosmos network, it will be rolled out in 2023. 
 
![usdc circle.png](https://s3.eu-west-2.amazonaws.com/prod-monitalks-media/usdc_circle_8a290a8d4b.png)

## Product VP on the multichain expansion

At the event, the Vice President of stablecoin issuer's Product, Joao Reginatto, shared his thoughts on the multichain expansion. He mentioned that Circle's USDC support for numerous blockchains will allow "greater liquidity and interoperability within the crypto economy." 

Moreover, he also announced that Circle's USDC will now be available on thirteen blockchains with the addition of new blockchains to come. Previously, it only supported eight networks. 

Circle's Product VP was also optimistic that the expansion might lead to more innovation. Also, he said that the exchanges, developers, and other institutions will enjoy "easier access to a trusted and stable digital dollar."

## Competition among stablecoin issuers

Stablecoins are crypto tokens that are backed by a fiat currency. Usually, the US dollar is used for it. They are essential in bridging the gap between the crypto market and the traditional economy. Stablecoins account for a total of $150 billion in the crypto market. 

Circle Internet Financial is one of them that offers stablecoins pegged with USD and [EURO](/news/article/euro-coin). It competes with other industry giants like [Tether](https://tether.to/). The company is looking to capitalise on its market share by extending its multichain support. 




Circle USDC expands support to five new networks

There has been lots of buzz about altcoins recently, making most crypto investors wonder if they are missing out on something big. But what is the altcoin buzz really about?

To fully understand the altcoin buzz, you first need to know what an altcoin is. 

## What are Altcoins?

Any digital currency that isn't [Bitcoin](/coins/btc) is an altcoin. The word "altcoin" is a portmanteau of "alternative" and "coin" to form "altcoin". It refers to a group of cryptocurrencies - all the coins other than Bitcoin. 

By market capacity, the top three altcoins are Ethereum, USD Coin, and Tether (USDT). Ethereum is the most popular. Other examples of altcoins are Shiba Inu, Solana, Litecoin, Dogecoin, XRP, Binance coin(BNB), ApeCoin(APE), and SandBox.

The first altcoins started in 2011, and now thousands of them exist. Early altcoins strived to improve Bitcoin's traits, such as transaction speeds or capacity efficiency. More recent altcoins perform a variety of tasks.
Different types include:

[Stablecoins](https://www.investopedia.com/terms/s/stablecoin.asp): Cryptocurrencies constructed to follow the price of another currency. Most of the biggest stablecoins are pegged to the US dollar and try to emulate its value. If the price fluctuates, the issuer of the coin will take actions to amend it. Examples include Tether(USDT), USD coin(USDC), and Dai(DAI).

Staking-based: These cryptocurrencies use a technique called staking to verify transactions and augment more coins to the stock. Owners of a staking-based cryptocurrency can select to stake their coins, meaning they're committing those coins to be used for transaction processing. The cryptocurrency's blockchain policy assigns a partaker to verify a block of transactions. In return, participants receive crypto prizes.

Mining-based: This cryptocurrency category uses a mining method to validate transactions and expand more coins to the supply. Miners use gadgets to solve mathematical equations. Naturally, the first miner to decipher the equation gets to validate a block of transactions. In return, miners who validate blocks obtain crypto bonuses.

Governance tokens: They are cryptocurrencies that bestow owners voting rights to help form the future of the project. In most cases, these tokens allow you to develop and vote on suggestions associated with the cryptocurrency.

## Are Altcoins Reliable and the Future of Cryptocurrency?

Future values of altcoins are hard to predict, but if the blockchain they were designed is used and developed, the altcoins are likely to continue and prosper.

With the current state of Bitcoin now, everyone is getting an education on other options they can invest in and use for transactions.

Each time Bitcoin drops in value is an opportunity for altcoins to rise and receive more investment. In recent months, there has been altcoin buzz because of the state of the market.

## Conclusion 

As we all know, Bitcoin is the biggest cryptocurrency. But the value has been hit in recent months, meaning crypto investors have looked at alternatives.

That has increased the altcoin buzz, as investors investigate the top altcoins to invest in and learn more about in times of a crypto crash.

Expanding an investment portfolio beyond Bitcoin can be sensible, especially as some altcoins could deliver significant profits.

As ever, before choosing to invest in any cryptocurrency, ensure you conduct thorough, independent research.


Altcoin Buzz: What's It All About?

The release of Euro Coin (EUROC) was announced by global fintech firm, Circle, on Thursday, June 16, 2022. Circle is the same firm that launched the [United States Dollar Coin (USDC)](/coins/usdc). Like USDC, Euro Coin will be a fully reserved, Euro-backed stablecoin. 

## How the Euro-backed stable coin works

The Euro Coin will function the same way as the Dollar Coin. Thus, 1 EUROC and 2 EUROC will be the equivalent of €1 and €2 respectively. 

As a regulated stablecoin, Euro Coin will be issued under the same full-reserve model of USDC. More importantly, the stablecoin was built on the same standards of security, transparency, and trust that have made USDC one of the most used digital currencies in the crypto finance space. 
 
Circle’s introduction of EUROC will help bridge traditional financial services and cryptocurrencies. Several businesses that do not have direct access to the Euro can use EUROC tokens as on-demand liquidity (ODL) to make and accept payments globally which settle in minutes.
 
Aside from this, the Euro Coins as a tradable token can be used to access crypto capital markets such as lending, borrowing, and trading. 

To ensure the security of the stablecoin to help prevent the ghosts of TerraUSD (UST), Circle has ensured that EUROC has 100% backing of euro-denominated reserves held conservatively in the custody of some of the leading institutions in the financial sector of the United States regulatory perimeter such as Silvergate Bank. 

Speaking on the [launch of EUROC](https://www.circle.com/en/pressroom/circle-announces-a-fully-reserved-euro-backed-stablecoin-euro-coin-euroc), co-founder and CEO of Circle, Jeremy Allaire said, “There is clear market demand for a digital currency denominated in Euros, the world’s second most traded currency after the U.S. dollar. With USDC and Euro Coin, Circle is helping to unlock a new era of fast, inexpensive, secure, and interoperable value exchange worldwide." 

Starting from June 30, EUROC will be made available to institutional clients through a free Circle Account. Uniswap, Huobi Global, Bitstamp, Curve, and Binance.US are among the exchanges that will be supporting the stablecoin. 

This will play an invaluable role in the lives of millions of people who would love to go about their financial lives with EUROC rather than USDC or other currency-backed stablecoins.


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