[thebean11]

> That's why you have FDIC insurance to cover the time period between say, a 30 day treasury and the worst case bank run.

Well, usually banks use your money for much riskier loans (business loans, personal loans, mortgages) which is why you need FDIC. Not because treasuries take too long to sell.

The volume on US treasuries is like half a trillion a day, so it shouldn't take very long to liquidate even large amounts of USDC's holdings..

[wolongong942]

Even worse is that a lot of these stablecoins have their funds deposited with Silvergate, a niche crypto bank that makes its money by lending to people like Michael Saylor. Their stock is down about 50% over a few months.

[dragontamer]

> The volume on US treasuries is like half a trillion a day, so it shouldn't take very long to liquidate even large amounts of USDC's holdings..

US Treasuries are down like 10% this year.

Yes, a bank can liquidate, but at a loss, a 10% loss in this case. The bank would rather hold-onto maturity, which could be 30-days or 90-days for some of the shorter bonds.

[thebean11]

Short term US treasuries specifically. They are pretty insensitive to interest rate changes since they are close to maturity.