Breaking: Coinbase Temporarily Halts USDC:USD Conversions Due to Banking Delays Over Weekend
Coinbase, one of the leading cryptocurrency exchanges, has announced a temporary pause in USDC: USD conversions over the weekend while banks are closed. Coinbase and Circle are the two founding members of Centre, with Circle in particular playing a significant role in the development of USDC.
According to a tweet from the exchange, conversions rely on USD transfers from banks that clear during normal banking hours, and during periods of heightened activity, such as the current market turmoil, such transfers can be delayed. Coinbase has assured its users that their assets remain safe and available for on-chain sends.
We are temporarily pausing USDC:USD conversions over the weekend while banks are closed. During periods of heightened activity, conversions rely on USD transfers from the banks that clear during normal banking hours. When banks open on Monday, we plan to re-commence conversions.
— Coinbase (@coinbase) March 11, 2023
This move by Coinbase comes in response to the current market conditions, which have been particularly volatile over the past few days. As the cryptocurrency market experiences a sell-off, many investors are rushing to liquidate their positions, causing a surge in trading activity. This has put a strain on the banking system, making it difficult for exchanges to process transactions in a timely manner.
Coinbase’s decision to pause USDC:USD conversions over the weekend is a standard risk-management procedure, and the exchange has stated that it plans to resume conversions when banks open on Monday. However, this news has raised concerns among investors, many of whom are wondering if other exchanges will follow suit.
In fact, Binance, another major cryptocurrency exchange, has already announced the temporary suspension of auto-conversion of USDC to BUSD due to market conditions. In a tweet, Binance stated that the decision was made in response to high inflows and the increasing burden to support the conversion. The exchange also noted that this move was a standard risk-management procedure, and that it will continue to monitor the situation.
The news of both Coinbase and Binance temporarily halting conversions has sparked speculation among investors about the stability of the cryptocurrency market. However, it’s important to note that these moves are simply risk-management measures taken by exchanges in response to current market conditions. As always, investors should exercise caution when investing in cryptocurrencies and should not invest more than they can afford to lose.
Overall, while the current market conditions may be causing some disruptions in the cryptocurrency space, exchanges like Coinbase and Binance are taking steps to mitigate risk and ensure the safety of their users’ assets. As the market continues to evolve, it’s likely that we will see more changes and adjustments from exchanges to keep up with the rapidly changing landscape of cryptocurrencies.
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