[PeterisP]

Well, not all USD is stuck in SVB, at least according to what they claim. If Coinbase knows that they have the reserves to back USDC, or 93% of the reserves to back USDC, then them buying back any USDC on the open market at 90% or less is huge amounts of certain profit, while everyone else has to gamble on what the Coinbase actual capabilities are and in many cases are willing to accept a haircut to gain certainty.

[VagueMag]

The problem is that Coinbase probably has no way to say for sure what percentage of the reserves will actually be liquid on Monday. Other banks which held USDC reserves included Signature Bank of NY and Silvergate, both of which are also looking shaky.

[sour-taste]

I think that only holds up while people still have faith in the coin. Once that faith is gone Coinbase can buy as much as they want the coin is worthless.

[gus_massa]

If it's fully backed by liquid stuff, they can just buy everything at $.90 and pocket the remainder 10% and get and early retirement.

If it's fully backed by illiquid stuff, the problem is how much the crash sale will eat from their 10% retirement plan.

If it's very illiquid and they can only sell it at 80%, the price of the coin will drop even more. If it's only illiquid for the weekend as they claim, it may go back to $1 on Monday.