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Binance has registered $1.9 billion of withdrawals in the past 24 hours, according to the blockchain data firm Nansen, as the world’s biggest crypto exchange said it had “temporarily paused” withdrawals of the USDC stablecoin.

So, it’s a bank run. Now, how illiquid is Binance? At this stage that’s all that matters…….

7 thoughts on “Oooops!”

  1. Wasn’t liquidity the question at FTX, right up until people realised the problem was solvency?

    I recently read that no one is really sure whether Tether, a stablecoin with $68bn worth in circulation, is actually backed by any assets at all. Apparently the main use of Tether is that people buy it with USD in order to buy other cryptocurrencies, mainly bitcoin.

  2. Why would they need to “temporarily pause” withdrawals? It’s an exchange – you literally just exchange one coin for another. If I go down the high street and try to buy Euros at Thomas Cook (showing my age…) but they don’t have any, I can just go next door to another exchange.

    Presumably Binance is both a bank account and an exchange; and they’ve been lending out their USDC on margin, like any bank. Fractional reserve banking when there’s no central bank, as they’ll soon find out.

  3. @MC
    I don’t see why the coin you mention would need to be backed by any tangible assets. If it’s being used for what you say it is, it’s a token of value. So it’s “asset value” would be the confidence it can be exchanged. Nothing more.

  4. @BiS – Tether was designed to be always valued at 1 USD (hence stablecoin) and the company which launched it claims it maintains reserves of 1 USD per Tether in issue. However, evidence of these assets has not been forthcoming.

  5. @MC This sounds like something would be used by those speculating in crypto currencies. As such, I’ll have accept beyond comprehension as the answer & leave it at that.

  6. Banged grains! Gethcher Banged Grains heaaar!! Only a Dollar anna Half!! And that’s cuttin’ me’own throat!!

    Ah, Thankyou Sir! Whut? Your change? Oh, nonono Sir! Those are Quirmian centimes. Very collectible at the moment. Set to become worth more than Morpork cents any time now, trust me!!
    *whisper* And woid is the Llamedan Groat is of Int’rest to the Golden King as-of current now, so if yoursir’d loik a floater..*winkwink*

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