Welcome to Token Issue! Delivered every Friday, this free newsletter breaks down the biggest stories in Asia’s crypto scene and beyond. View past issues here or sign up here to receive future newsletters.
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Two weeks ago, I spoke to Dante Disparte, Circle’s chief strategy officer, about why it pays to be pro-regulation, even if the regulations are unclear.
By then, the company had transferred its deposit at Silvergate Bank to other banking partners and appeared poised to drive global expansion efforts for USD Coin (USDC) and Euro Coin (EUROC).
Happily, I submitted the story and peaced out to a much-needed family holiday in Thailand.
This week, I returned to find that Circle’s USD Coin unpegged from the US dollar almost immediately after my story was published on March 10 due to the closure of Silicon Valley Bank (SVB).
Oof. “Welcome back, Shihan,” said no one in particular.
The coin was repegged two days later after the Federal Deposit Insurance Corporation (FDIC) guaranteed that all depositors at SVB would be made whole, including Circle, which had US$3.3 billion in the bank.
Circle’s market cap is now down 20% – it fell by US$8.8 billion in just two weeks and continues to sink. Announcements of its new European headquarters in France and participation in the US$10 million investment in the yuan stablecoin CNH Coin, led by KuCoin Ventures, has not fully restored confidence in USDC and EUROC.
Part of Circle’s exodus appears to have been absorbed by its archrival Tether, which has increased its market cap by US$5.8 billion since USDC unpegged.
Bitcoin holders are also enjoying a rally. The coin broke past the US$20,000 market on March 10, surged past US$25,000 on March 17, and is now trading above US$27,000.
Meanwhile, banks continue to melt down. This week, the fourth and largest bank to bite the dust is Credit Suisse, which was sold off to Swiss rival UBS for US$3.2 billion on March 19 in a hasty deal brokered by the Swiss Financial Market Supervisory Authority (FINMA).
The deal includes a write-off of US$17 billion worth of risky AT1 bonds. Some bondholders are now preparing to take legal action.
Investment research firm Morningstar has drawn a timeline detailing the demise of the 166-year-old banking giant, while staff in Credit Suisse’s Singapore and London offices are frantically calling up headhunters to secure their next gig.
For this week’s Deep Dive, we look into Hope, a new project from the co-founder of Babel Finance, Flex Yang. Hope is designed to become a stablecoin once the project accumulates enough reserves – a process expected to take three years – and will be backed by digital assets and bonds from Singapore and Hong Kong.
🤿 THE DEEP DIVE
👀 ALL EYES ON…
⭐ TO THE STARS
MORE TO CHEW ON
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