Bitcoin Price: US$ 21,997.11 (+7.54%)
Ethereum Price: US$ 1,580.33 (+7.36%)
The recent crisis at Silicon Valley Bank has resulted in increased volatility for USD Coin (USDC), the world’s second-largest dollar-pegged stablecoin, and has led to bitcoin trading at relatively higher prices on crypto exchange Coinbase. The premium index on Coinbase, which measures the spread between bitcoin’s U.S. dollar-denominated price on Coinbase and its tether-denominated price on offshore giant Binance, rose to 0.8, the highest since March 2020, likely reflecting a discount or flight from USDC rather than stronger buying pressure from stateside institutions and sophisticated traders. Meanwhile, Ethereum’s upcoming Shanghai upgrade, scheduled for March, will allow users to withdraw staked Ether, increasing the network’s liquidity and competitiveness while also benefiting Ethereum liquid staking platforms.
USDC issuer Circle has pledged to “cover any shortfall” caused by the $3.3 billion in funds held by collapsed Silicon Valley Bank, which caused USDC to lose its peg to the US dollar. Circle is legally obliged to “stand behind” USDC and will use corporate resources and “external capital if necessary” to ensure the stablecoin can be redeemed at a 1:1 ratio with USD. Several crypto firms have also signaled their exposure to the bank, including Ripple, BlockFi, Pantera, the Avalanche Foundation, Yuga Labs, and Proof.
MakerDAO’s risk unit issued an emergency proposal to its governance community to limit its exposure to USDC after the stablecoin lost its peg to the US dollar following the collapse of Silicon Valley Bank. The proposal includes reducing the maximum amount of DAI borrowed against specific collateral, reducing daily mint limits, increasing fees to discourage dumping of USDC, and eliminating exposure to other DeFi protocols. Meanwhile, Treasury Secretary Janet Yellen said that the federal government is not considering a bailout for Silicon Valley Bank but is focused on meeting the needs of its depositors.
The US Federal Reserve, Treasury Department, and FDIC have announced that depositors in both Silicon Valley Bank and Signature Bank will have access to their funds starting Monday after Signature Bank was shut down by New York’s state chartering authority. The decision was made in consultation with President Joe Biden, and taxpayers will not bear any losses. In other news, the Cosmos community has approved the addition of “replicated security” to its chain, with the upgrade set to go live on March 15. The feature allows blockchains in the Cosmos ecosystem to share validation resources for improved security and additional yields to ATOM stakers. Finally, the Aave DAO has passed a proposal authorizing developers to upgrade smart contracts that have mistakenly sent tokens in the past, causing them to send the lost tokens back to their original owners automatically.
Source:
https://cointelegraph.com
https://coindesk.com
https://decrypt.co
https://theblock.co
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