Analysts at rating agency Moody’s believe that the recent drop in the USDC stablecoin to $0.89 could lead to a decrease in the adoption of all stable cryptocurrencies and tighten regulation.

Recall that recently a large-scale crisis broke out in the American banking sector, which led to the collapse of such large banks as Silicon Valley (SVB) and Signature. The company behind the USDC stablecoin, Circle, held over $3 billion worth of reserves in SVB. Therefore, stablecoin owners panicked and began selling off their holdings. This led to USDC decoupling from the dollar.

“Until now, large stablecoins backed by fiat currencies have shown amazing resilience. They survived major scandals in the cryptocurrency industry without any problems, such as the collapse of the FTX exchange. However, recent events have shown that stablecoin issuers depend on a fairly small set of financial institutions and this limits the stability of stablecoins,” write analysts Cristiano Ventricelli, Vincent Gusdorf, Rajeev Bamra and Fabian Astik. Astic).

The stablecoin USDC quickly restored its peg to the dollar. However, as Moody’s analysts emphasized, this happened only after the US Federal Deposit Insurance Corporation (FDIC) announced that it would support Silicon Valley Bank and pay all deposits to bank customers.

“If the FDIC had not supported the bank, USDC capitalization would continue to fall rapidly, and Circle would be forced to draw on reserves. Given the current market situation, this would increase pressure on the banks where Circle holds assets, and this could lead to risks for other stablecoins, ”analysts say.

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Earlier, the CEO of the largest cryptocurrency exchange Binance, Changpeng Zhao, said that it was traditional banks that became the real risk for stablecoins backed by fiat currencies.