You might think that now that stablecoins are being brought under regulation, depegging events like "black swan" incidents should be much harder to happen. After all, the GENIUS Act requires 1:1 full reserves.
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But one notable phenomenon is that even with regulation, major stablecoins still have a history of depegging. From USDT's three crises to USDC falling to $0.87 after Silicon Valley Bank collapsed, these events happened after various regulatory frameworks had already begun taking shape.
First, look at the facts: depegging among major stablecoins is not a myth
The original design goal of stablecoins is indeed "stability" — maintaining value stability through 1:1 fiat reserves. But in reality, even top stablecoins have experienced multiple depegging events:
USDT's three depegging events:
The first was in April 2017, when Wells Fargo terminated Bitfinex's correspondent clearing services, users could not withdraw funds in time, and USDT once fell to $0.91.
The second was in October 2018, when Bitfinex was accused of using about $850 million of Tether's reserves to cover operating losses. This was later confirmed by an investigation by the New York Attorney General.
The third was in 2022, when panic redemptions triggered by the UST collapse pushed USDT down to $0.95.
USDC's depegging event:
In March 2023, USDC depegged to $0.87 — because its core custodian bank, Silicon Valley Bank, collapsed. Circle had $3.3 billion in reserves at SVB, accounting for about 8% of USDC's total reserves.
Can regulation truly eliminate depegging risk?
Regulation reduces some risks, but it does not eliminate all of them.
What regulation solves:
The GENIUS Act requires payment stablecoin issuers to hold 1:1 full reserves in eligible highly liquid assets for every stablecoin in circulation. This closes the loophole where issuers could "make up the numbers" with volatile assets, and helps reduce user panic caused by uncertainty over whether reserves are sufficient.
What regulation does not solve:
Liquidity crises: Even if issuers hold large amounts of U.S. Treasury bonds, stablecoin issuers cannot avoid sudden liquidity crises. The core problem exposed by USDC during the Silicon Valley Bank incident is that compliant banks themselves can also fail. This is a credit event risk that regulatory frameworks find difficult to eliminate in advance.
Differences in asset structure: As of June 30, 2026, about $47 billion of Tether's roughly $187.75 billion in reserves — around 25% — consisted of precious metals, bitcoin, secured loans, and other asset categories that do not meet the reserve requirements of the GENIUS Act. This asset structure makes the reserves of USDT and USDC look more like hedge funds than true fiat-pegged instruments.
Cross-border regulatory arbitrage: Because global regulatory frameworks differ, multiple issuance mechanisms may cause risks to spread across jurisdictions, making it difficult for a single country's regulation to provide complete coverage.
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What should users do?
Use facts rather than "regulatory endorsement" to judge a stablecoin's margin of safety.
Specific practical methods:
Distinguish the source of regulation: If a stablecoin is regulated by NYDFS (New York State Department of Financial Services), its reserve transparency and compliance framework are usually stricter. For example, RLUSD is regulated by NYDFS and receives monthly attestation reports from an independent accountant.
Focus on reserve composition, not just whether it has an audit: A stablecoin "having an audit" only means it has been checked; it does not mean it is 100% safe. Focus on the asset composition in the report: are the reserves in U.S. dollar cash or short-term Treasury bills, or do they include bitcoin, commercial paper, and loans?
Completion standard for judgment: You can describe the general reserve composition of the stablecoin you hold and identify which jurisdiction regulates it.
Verification method after completing the steps: Visit the transparency page on the issuer's official website and check the latest third-party attestation or audit report. Confirm the reserve asset composition — if the report shows a high proportion of short-term U.S. Treasury securities and cash, redemption risk is lower; if it holds bitcoin, commercial paper, or other volatile assets, you need to assess it against your own risk appetite.
Next action: If you hold a large amount of stablecoins, spend 10 minutes downloading the latest attestation report from the official website of USDC or USDT to see whether the reserve composition matches your understanding. This habit is far more useful than waiting until problems arise and then asking others.
