The rates of USD Coin and DAI stablecoins began to restore their binding to the US dollar. The cost of USDC, which fell to $0.87 on March 11, rose to the levels of $0.98–0.99 on March 13, the DAI token, after falling to $0.88, also rose in price to $0.98–0.99.
The USD Coin and DAI stablecoins lost their binding to the underlying asset from the US dollar after the news about the closure of Silicon Valley Bank. It turned out to block $3.3 billion from the funds of the Circle company, which provided the USDC stablecoin. This is about 8% of the total amount of collateral for the asset of almost $40 billion.
Dai is the fourth largest stablecoin with a market capitalization of approximately $5 billion, a decentralized token issued by the Maker DAO organization. The price of the asset has fallen as its reserves are almost half secured by the USDC.
The restoration of the binding of the rates of stablecoins to the dollar takes place against the background of active actions of their issuers. The MakerDAO ecosystem community “urgently” voted in favor of a proposal to adjust the working conditions of the protocol. The changes introduced since March 13 should limit the impact of the depreciation of other stablecoins on DAI. The maximum number of DAI tokens that can be borrowed for specific collateral will be reduced, and the daily issue of stablecoin will be limited to 250 million. Also, the system will increase the commission for issuing a token against the USDC from 0% to 1%.
The issuer of the USDC— Circle Company, announced on March 13 that the risk of losing $3.3 billion blocked in Silicon Valley Bank has been removed. Access to these assets will be open to Circle on March 13 with the start of the working day in the USA.
In addition, the co—founder and head of Circle, Jeremy Allaire, announced that the company has entered into a partnership with another bank focused on cryptocurrencies – Cross River Bank.
Allaire also noted that now more than ever it is necessary to secure the financial system by adopting the law on stablecoins, which involves storing reserves of such assets in the Fed and in short-term debt securities of the US Treasury (Treasury Department).