Coinbase hit the brakes on conversions between USDC stablecoin and US dollars late Friday as fallout from Silicon Valley Bank's collapse spread into the heart of crypto trading.
In a tweet, the crypto exchange said it was "temporarily pausing" the conversions while banks are closed over the weekend. It said it planned to restart conversions on Monday. Coinbase supports redemptions between US dollars and USDC as Circle Internet Financial's partner in the Centre Consortium, USDC's issuer.
While temporary, the pause speaks to the chaos that's roiled the crypto industry's second-largest stablecoin in the wake of Silicon Valley Bank's demise. All day Friday crypto traders speculated on the stability of USDC and redeemed $1.6 billion of the stablecoin, lowering its total supply. Circle counted on Silicon Valley Bank as a parking spot for $3.3 billion of cash backing the $40 billion USDC; the fate of that cash is now uncertain, as SVB has been seized by the FDIC.
"During periods of heightened activity, conversions rely on USD transfers from the banks that clear during normal banking hours," Coinbase said in its tweet. "When banks open on Monday, we plan to re-commence conversions."