Silvergate Exchange Shutdown: Are Stablecoins Becoming The New Crypto Kings?

With the collapse of both the Silvergate Exchange Network SI and FTX FTT/USD, stablecoins are expected to become even more ubiquitous as traders deposit their dollars with stablecoin issuers and transfer them to exchanges.

SEN was widely used by exchanges, market makers, and investors to move large amounts of U.S. dollars quickly and easily, but with its demise, liquidity could suffer.

Coinbase COIN, Paxos, Galaxy Digital, and other major cryptocurrency companies have already dropped Silvergate as their banking partner, leaving Signature Bank as one of the few remaining banking alternatives. 

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However, stablecoins may provide a viable solution to the "fiat problem," market research firm Kaiko stated.

The market share of dollar to Tether USDT/USD trade volume has climbed from 3% to 92% since 2017, Kaiko reported.
The decline in the use of the dollar in the crypto market is also a growing concern. 

The number of new dollar-denominated trading pairs listed by exchanges fell from 400 to 326 in 2022, while the number of new euro-denominated pairs increased from 96 to 165. 

While the dollar and dollar-pegged stablecoins remain the foundation of the crypto-economy, the growing complications with USD payment rails could upend this trend.

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