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Comment by bhaak | Hacker News Reader

Terra was no stablecoin and it has been constantly pointed out that it wasn't.

USDC is backed 1 USDC for 1 USD. What you're actually seeing here is that the traditional finance system has lead to a crash in crypto. That's almost refreshing. Usually crypto fucks up by itself (see FTX and Terra for the most recent ones).

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What's their balance sheet at the moment assuming 8% of cash is missing? Is it still 1:1 or 1:.94?

Also coindesk says TerraUSD is a stablecoin.

https://www.coindesk.com/price/terrausd/

Washington Post too:

https://www.washingtonpost.com/business/what-are-stablecoins...

Also Gemini says it as well:

https://www.gemini.com/en-us/prices/terrausd-ethereum

Their balance sheet is still 1:1 as the 8% at SBV has not yet been written off.

The market reacts faster of course but the market has no crystal ball. It can't predict what's going to happen.

Arguably, the FTX debacle is in the same bucket, as it was caused by people having their money on an exchange that essentially functioned like a fractional reserve bank.

FTX functioned more like a self-flushing toilet.

1 USD worth of treasuries or bank deposits, not a USD directly.

> USDC is backed 1 USDC for 1 USD

It’s at least 87¢ and 23¢ of priority unsecured claims on a bank in receivership.

I assume you're deriving the 23¢ from the 23% they have banked, but I would like to note that of that 23%, roughly a third (3.3bn of 9.7bn) was with SVB. The rest was with other banks not facing the same issue.

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