Delphi Digital: Even if stablecoins have sufficient collateral, it does not mean they are immune to potential runs

Delphi Digital tweeted, "Tether and Circle are not foolproof systems. Just because they are backed 1:1 by short-term government bonds and cash equivalents does not mean they are immune to potential runs. The USDC depegging incident during the collapse of Silicon Valley Bank (SVB) in early 2023 already revealed signs of this risk.

USDC was originally fully reserved, but when Silicon Valley Bank collapsed, part of the reserves became temporarily inaccessible. This means the risk has merely shifted upwards. In traditional banking, payment risk is usually dispersed among various institutions; in the stablecoin system, while payment channels may be deterministic and automated, this means that the settlement risk, which was previously eliminated among participants, is now concentrated at the issuer level. The system has not become risk-free; rather, it has transformed into a vertically dependent structure. This is precisely why concerns about issuer concentration have begun to arise."