What if a stablecoin issuer loses its banking partner and breaks the peg?
A stablecoin issuer losing its banking partner strands fiat reserves and breaks the on/off-ramp, depegging the coin and dumping ETH/SOL/BTC as the dollar bridge fails. This is the March-2023 USDC/SVB episode and the 2018 Tether/Noble Bank scare in one — USDC depegged to $0.87 before First-Citizens/Fed action restored the ramp. Skeptic's note: contagion is intra-crypto; the equity/credit spillover is small — trade the depeg and crypto beta, not the S&P.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. The banking partner of a major stablecoin issuer abruptly severs ties, stranding fiat reserves and breaking the on/off-ramp peg mechanism. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Crypto confidence ▼ · Risk appetite ▼ — which propagate through our causal graph to the markets below.