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The real question is why doesn't Coinbase take all their assets and buy USDC at $0.90. From their perspective, it is free money.

deleted 4y ago
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vgatherps 4y ago
Stablecoin provider doesn’t buy up cheap stablecoin: “it’s really suspicious that they’re not buying cheap stables, something’s wrong” Stablecoin provider buys up cheap stablecoin: “it’s really suspicious that they’re supporting the stablecoin price, something’s wrong”
- Kinrany 4y ago
  How is the latter suspicious? That's exactly how stablecoins work
  - vgatherps 4y ago
    Stablecoin providers create/redeem at par, that’s the main mechanism. Algo “stables” like Ust might do it as a sort of bailout but that’s because they aren’t a backed 1-1 instrument.
cft 4y ago
Because it may go to 0
- jenadine 4y ago
  Care to elaborate? Do you mean that they know that it will go to 0 and that's why they are not buying?
- swalsh 4y ago
  USDC != UST, it is backed by assets. Some of those assets were in SBV, which is why it is down... but 90% of the assets were not, we know the number because Circle is transparent, and has 3rd party audits.
throwaway98797 4y ago
coinbase is not letting people buy USDC on their platform you could buy DAI which is also trading at a discount though
capableweb 4y ago
Coinbase seems to be taking steps to have enough liquidity at all times. So they don't lend "or take any action" with user funds unless the user explicitly instructs them to. > The vast majority of Coinbase client cash is stored in FDIC-insured bank accounts. When a client has a large dollar balance, Coinbase stores their cash in a U.S. government money market fund to keep it safe and liquid. Like all assets on Coinbase, we hold client cash 1:1 and your assets are your assets. We do not lend or take any action with your assets unless you specifically instruct us to. "How is client cash stored at Coinbase?" - https://help.coinbase.com/en/coinbase/other-topics/other/client-cash https://help.coinbase.com/en/coinbase/other-topics/other/cli... Doing something like you describe what also be a huge risk, what happens if USDC falls to 0? Everyone lost their funds? I'm sure there would be countless lawsuits if that was to happen.
- sebzim4500 4y ago
  Doesn't Coinbase own a significant part of Circle though? Probably shouldn't let USDC go to zero.
  - UncleEntity 4y ago
    Letting USDC go to zero won’t end them up in prison while using customer deposits probably will. And once the government takes over a bank they make everything alright because they don’t want people to question the entirety of the banking system.
meltedcapacitor 4y ago
Easier said than done: they don't have that many assets that are their own; the market depth at 0.9 is probably not much; and they, like everyone else, would take the risk USDC ultimately gets redeemed at 0.9 or whatever the shortfall ends up being. Plus their compliance dude is going to throw a tantrum.
deweller 4y ago
Many of their assets are likely in a bank - which is closed until Monday.

deleted 4y ago

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vgatherps 4y ago

Stablecoin provider doesn’t buy up cheap stablecoin: “it’s really suspicious that they’re not buying cheap stables, something’s wrong” Stablecoin provider buys up cheap stablecoin: “it’s really suspicious that they’re supporting the stablecoin price, something’s wrong”

Kinrany 4y ago
How is the latter suspicious? That's exactly how stablecoins work
- vgatherps 4y ago
  Stablecoin providers create/redeem at par, that’s the main mechanism. Algo “stables” like Ust might do it as a sort of bailout but that’s because they aren’t a backed 1-1 instrument.

cft 4y ago

Because it may go to 0

jenadine 4y ago
Care to elaborate? Do you mean that they know that it will go to 0 and that's why they are not buying?
swalsh 4y ago
USDC != UST, it is backed by assets. Some of those assets were in SBV, which is why it is down... but 90% of the assets were not, we know the number because Circle is transparent, and has 3rd party audits.

throwaway98797 4y ago

coinbase is not letting people buy USDC on their platform you could buy DAI which is also trading at a discount though

capableweb 4y ago

Coinbase seems to be taking steps to have enough liquidity at all times. So they don't lend "or take any action" with user funds unless the user explicitly instructs them to. > The vast majority of Coinbase client cash is stored in FDIC-insured bank accounts. When a client has a large dollar balance, Coinbase stores their cash in a U.S. government money market fund to keep it safe and liquid. Like all assets on Coinbase, we hold client cash 1:1 and your assets are your assets. We do not lend or take any action with your assets unless you specifically instruct us to. "How is client cash stored at Coinbase?" - https://help.coinbase.com/en/coinbase/other-topics/other/client-cash https://help.coinbase.com/en/coinbase/other-topics/other/cli... Doing something like you describe what also be a huge risk, what happens if USDC falls to 0? Everyone lost their funds? I'm sure there would be countless lawsuits if that was to happen.

sebzim4500 4y ago
Doesn't Coinbase own a significant part of Circle though? Probably shouldn't let USDC go to zero.
- UncleEntity 4y ago
  Letting USDC go to zero won’t end them up in prison while using customer deposits probably will. And once the government takes over a bank they make everything alright because they don’t want people to question the entirety of the banking system.

meltedcapacitor 4y ago

Easier said than done: they don't have that many assets that are their own; the market depth at 0.9 is probably not much; and they, like everyone else, would take the risk USDC ultimately gets redeemed at 0.9 or whatever the shortfall ends up being. Plus their compliance dude is going to throw a tantrum.

deweller 4y ago

Many of their assets are likely in a bank - which is closed until Monday.