Banking hours and stablecoin peg repair: evidence from the SVB-USDC episode

We study whether banking-hour constraints on redemption settlement delay fiat-backed stablecoin peg repair, using the March 2023 Silicon Valley Bank (SVB)–USD Coin (USDC) episode. The joint federal backstop on Sunday evening resolved reserve-impairment concerns and lowered USDC’s mean discount from 4.49 to 1.31% points, yet that residual discount persisted overnight with no intervening break. Structural break tests locate the next break on Monday morning, when the discount falls by 56%. The break aligns with the reopening of U.S. customer-facing banking: no comparable break appears in Bitcoin and Ether or in placebo weekends; issuer burn activity had already begun beforehand; and order flow turns from net selling to concentrated buying immediately after the break. This suggests that bank-dependent settlement infrastructure can become a binding operational constraint on peg restoration, distinct from reserve quality.