• The U.S. government has announced plans to backstop all deposits at two failed banks, while also pledging to secure at least 8% of the collateral for the USDC stablecoin.
• Circle CEO Jeremy Allaire discussed emergency measures his company took to keep USDC from depegging from the U.S. dollar as well as their plan to turn stablecoins into “straight-through government obligation money.”
• Arthur Hayes proposed NakaDollar (NUSD), a stablecoin backed by bitcoin and bitcoin derivatives, which could provide liquidity and stability if accepted by investors and crypto exchanges.
The Banking Crisis Has Been Good for Stablecoin Experimentation
Sovryn, a Bitcoin DeFi protocol, announced a new dollar proxy as others look at alternative models for collateralizing stablecoins amid a banking system crisis. By Daniel Kuhn
Stablecoin Backed by U.S Government
The U.S Treasury Department, Federal Reserve and FDIC announced plans to backstop all deposits at two failed banks, they were also pledging to secure at least 8% of the collateral for the USDC stablecoin. Circle, the stablecoin’s issuer, said it keeps around a quarter of USDC’s reserve assets at about six banks in order to avoid depegging from the U.S dollar during times of crisis or instability in banking systems worldwide.
NakaDollar: A Potential Alternative
Arthur Hayes co-founder of crypto exchange BitMEX proposed NakaDollar (NUSD), a stablecoin backed by bitcoin (BTC) and bitcoin derivatives which would theoretically be deeply liquid and attractive to traders providing stability if accepted and used by investors and crypto exchanges .
Circle’s Strategy
Circle CEO Jeremy Allaire spoke about the emergency measures his company took, as well as the serious game theorizing Circle has played over the past two years to spread out its cash and one day essentially turn stablecoins into “straight-through government obligation money.”
“The Hash” Panel Discussion
The panel discussed Hayes’ proposal on how it will affect future of the stablecoin market along with other possible solutions that can be implemented in order to make them more secure during financial turmoil or market crashes .