They didn't pause anything. The US banks did, by not working in the weekend (for large sums).
If you had 1 billion USD with your favorite US bank, that would be paused too right now.
If you had 1 billion USD with your favorite US bank, that would be paused too right now.
It seems like they’re simply forcing people to hold USDC, full stop, and are blaming banks for their decision to do so.
However, other exchanges actually do have USDC markets for most other cryptocurrencies. If you deposit your USDC with them, then you can directly trade order books on USDC/USD, BTC/USDC, and ETH/USDC, which function regardless of the lack of redemption and regardless of the actual market price of USDC.
If Coinbase had lots of USDC trading pairs like other exchanges do, it would avoid the issue you outlined in your comment, but it would also fragment liquidity across two markets that are effectively identical during business-as-usual periods where redemptions function properly.
That would be the fault of Coinbase, not Circle or USDC. On other exchanges, like Bitstamp, you can freely buy/sell your USDC to crypto/fiat.
If I move USDC from one wallet to another, and someone else moves bitcoin from one wallet to another in exchange for that USDC, that transaction happens entirely on the blockchain and at no point involves a bank or a peg.
The only reason to disable that function is to force people to hold USDC.