The impact of the closure or takeover of the three major crypto-friendly banks (#Silvergate, #SiliconValleyBank, and #Signature) includes:
Changes in the scale of fiat-collateralized stablecoins;
Disruptions in funding channels;
New growth opportunities;
Although USDC's funds have been resolved in the bankrupt Silicon Valley Bank, it has returned to $1 from its off-peg state, just like the common joke in futures trading, "the price hasn't changed, but the position is gone."
Changes in the scale of fiat-collateralized stablecoins;
The overall rise of the US stock market and cryptocurrency market has been overlooked due to factors such as a weakened expectation of interest rate hikes, but the impact of this event on the crypto industry is still significant.
Currently, it is seriously affecting the convenience of fund inflows and outflows, as well as incremental funds brought by a large number of users and institutions.
The scale of fiat-collateralized stablecoins has been affected by the outflow of USDC, which totaled $4.36 billion in the past week, and this data deserves continued attention in the near future.
The proportion of USDT, which is known for its lack of transparency, continues to grow.
Recently, BUSD, supported by Binance, encountered regulatory issues and switched to supporting TUSD, whose service bank is Signature.
TrustToken has sold its TUSD business, but $TRU, which is conceptually related to its growth, has frequently appeared on the list of top gainers with significant fluctuations.
Impact on fund inflows and outflows channels:
After the closure or takeover of Silvergate, Silicon Valley Bank, and Signature Bank, CEXs turned to Signature Bank.
However, Signature Bank was also quickly shut down. According to sources familiar with Signature Bank, bank staff were also surprised by the closure of Signature Bank. The rapid closure of three crypto-friendly banks can be seen as a sign of the US's special regulatory focus on the crypto industry.
DCG said that many mainstream banks such as HSBC, Deutsche Bank, and Santander are still willing to provide services to crypto companies, which can solve the problem of fund storage. However, they will restrict economic and monetary market services and services such as third-party wire transfers, which means that fund inflows and outflows channels are affected.
Although the New York Department of Financial Services stated that the takeover of Signature Bank has nothing to do with the crypto industry, Circle is also looking for new banks to conduct USDC's inflow and outflow services. It is worth paying attention to the follow-up developments.
New growth opportunities
Due to the collapse of UST and other crypto-native stablecoins, stablecoins have gone from crypto-native to fiat-backed and back to crypto-native. Crypto-native stablecoins have once again become a new narrative, with DAI and Frax fluctuating due to USDC collateral, and LUSD, crvUSD, GHO, and other emerging stablecoins given new hope.
Cryptocurrency-native stablecoins on the market
Threshold
On March 14th, privacy network Threshold Network announced the upcoming launch of its USD stablecoin, thUSD, based on tBTC. The stablecoin is based on the Liquity protocol mechanism and generates USD-pegged stablecoins using tBTC as collateral (tBTC is a derivative token bridging Bitcoin to Ethereum via Threshold Network's cross-chain solution).
HOPE
On March 13th, Flex Yang, the founder of Babel Finance, launched a distributed stablecoin called HOPE, which is backed by native cryptocurrency assets. During its development phase, HOPE will be supported by BTC and ETH.
The HOPE ecosystem includes four protocols: HopeSwap, HopeLend, HopeConnect, and HopeEcho, providing trading, lending, derivatives, and synthetic asset functions. In addition, the project will launch an incentive and governance token called LT (Light Token) to encourage user participation in ecosystem applications and governance.
In its early stages, HOPE will be minted and burned by anchoring to BTC/ETH. As it grows, the price of HOPE will fluctuate with the price of the anchor, making HOPE effectively an ETF for BTC and ETH, thus avoiding the spiral of death event that occurred with Terra.
Once the reserves are sufficient, or even in excess, HOPE will enter its mature stage, and its price will gradually stabilize at $1, making it a stablecoin. After maintaining excess reserves to ensure ecosystem stability, assets that participate in pledging to mint HOPE will be voted on to expand, including censorship-resistant stable assets such as Curve 3Pool LP Tokens and DAI.
NUSD
On March 9th, Arthur proposed the creation of NUSD (The Satoshi Nakamoto Dollar), a stablecoin based on Bitcoin. NUSD consists of the value of Bitcoin and a short position in an "inverse perpetual swap contract between Bitcoin and the US dollar", which can maintain the stability of its value through the derivatives market. At the same time, it is necessary to establish NakaDAO and provide a trading venue for perpetual swap contracts by centralized trading platforms to maintain the normal operation of NUSD.
Arkadiko
Arkadiko is an open-source, non-custodial liquidity protocol built on the Stacks smart contract platform. Users can use the protocol to collateralize assets, mint the stablecoin USDA, earn interest on deposits, and borrow assets on Stacks. The governance token for Arkadiko is DIKO, which can be obtained by adding liquidity to the pool by collateralizing assets.
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