Charles Hoskinson, the co-founder of the blockchain companies Input Output Global (IOG) and Coinbase tweeted today morning clarifying Coinbase’s announcement on the temporary halt of USDC: USD conversion during the weekends while the banks are closed. Hoskinson reiterated that it is essential to have full-fledged research on algorithmic stablecoins to realize “the original vision of Bitcoin”.
Notably, on March 11, the Coinbase CEO shared the Twitter thread emphasizing that the “banks would always let you down as long as they are fractional reserve”:
I still firmly believe that algorithmic stablecoins long term are the most essential research stream to fully realize the original vision of Bitcoin. Banks will always let you down as long as they are fractional reserve. https://t.co/zeQVSzhuaI
— Charles Hoskinson (@IOHK_Charles) March 11, 2023
In the morning hours of March 11, Coinbase announced that the conversion of USDC to dollars would be paused on weekend days, assuring that the conversions would be resumed on Monday when the banks reopen:
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.
Significantly, the tweet shook the crypto community with a lot of investors being nervous about the sudden closure of conversions. Some of them were even worried about the uncertainty of the situation, pointing out the “if” condition.
As a response to Coinbase’s declaration, Jesse Powell, the co-founder of the US-based crypto exchange tweeted that the market might be losing faith in “the US-homed financial products:
$USDT “depegged” to the upside, worth 1.06 $USD and 1.08 $USDC today. $USDC dipped to 0.89 $USD. You have to wonder if the market is losing faith in US-homed financial products.
Board: https://t.co/ndnGPaSwmm pic.twitter.com/Fi6Fh5mSQk
— Jesse Powell (@jespow) March 11, 2023
In addition, he pointed out that the USDT “depegged” to the upside, “worth 1.06 USD and 1.08 USDC”, mentioning that USDC dipped to 0.89 USD.
It was in response to suspicions of Powell regarding the pegged stablecoins, Hoskinson commented about the interference of the traditional banks that stands as a hindrance in the flawless functioning of the decentralized financial institutions.
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