Circle and USDC Close to Bankruptcy? FUD or Not? Bitcoin Could Once Again Save the Day.
An ounce of prevention is worth a pound of cure ...
Stablecoins have been going through a particularly difficult time in recent months. The current Bear Market has brought to light the bad practices of some and even the scams that the Bull Market may have previously masked.
Since the collapse of the UST in May 2022, financial regulators around the world have had their sights set on stablecoins. Not to mention the controversy that has been surrounding Tether's USDT forever, it is now Circle's USDC that is caught up in the rumors.
To understand the potential crisis facing Circle and the USDC, we have to go back to the company's partnership with Signature and Silvergate banks.
A rumor widely relayed on Twitter suggests that the company was paying a 5% interest rate to these banks to systematically convert the dollars deposited by its clients into USDC. The operation has already cost Circle $500 million:
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