Tokens that all target one US dollar can lose their pegs for different reasons and rely on different recovery mechanisms. Distinguishing UST’s exchange design, USDC’s dependence on bank deposits and DAI’s acceptance of other stablecoins reveals shared risks that adding more token names does not remove. This article uses events from 2022–2023 to explain how to check the exit routes for products you hold today.
Separate the target price from your available sale price
A depeg is a market price moving away from its target; it does not refer only to a legal change in a redemption promise. Direct redemption with an issuer is different from selling to other participants on an exchange or decentralized market. Eligibility, bank opening hours, identity checks and minimum amounts mean that holders of the same token can have different available exits.
A Federal Reserve staff analysis dated February 23, 2024 examines March 2023 by separating issuance and redemption markets from secondary markets. It is the authors’ analysis, not a central-bank guarantee of any product. Check the product contract and current access conditions to establish whether you personally can redeem directly with the issuer for one dollar.
| Layer to check | Question | Constraints beyond the amount |
|---|---|---|
| Reserve assets | What is held, and where? | Liquidation, freezes and reliance on custodians |
| Redemption access | Am I eligible? | Hours, minimum amounts and screening |
| Secondary market | Can I sell the required quantity? | Order-book depth, trading halts and costs |
UST’s exchange token also lost value
UST’s May 2022 collapse cannot be treated as merely waiting for a bank to reopen. In a mechanism that reduces UST while increasing the LUNA received in exchange, the market’s capacity to absorb those tokens matters. Distinguish a right to receive external cash from a swap into another token issued within the same system.
Suppose USD1 million is exchanged for LUNA. At an assumed LUNA unit price of USD10, issuance would be 100,000 tokens; at USD1, one million tokens would be needed. These are not historical issuance figures. They illustrate how a falling unit price requires more tokens for the same dollar amount. If the market price falls after receipt, the tokens may not sell for the dollar amount used in the calculation. Mechanically increasing supply and participants rushing to sell can interact.
Keep judicial facts about individuals separate from technical analysis. According to the US Department of Justice announcement of December 11, 2025, Terraform founder Do Kwon pleaded guilty that August and received a 15-year prison sentence on December 11. That announcement does not establish that every proceeding, including those abroad or any appeals, has ended. Nor does it justify treating every algorithm-based product as the same crime.
USDC highlighted reserve deposits and weekend access
The Federal Reserve staff analysis describes Circle’s March 10, 2023 disclosure that it had been unable to move USD3.3 billion of approximately USD40 billion in reserves out of SVB. Dividing 3.3 by 40 gives approximately 8.25%, using rounded figures from that time. This does not describe today’s reserve composition or a definitive loss rate for token holders.
The US Treasury, Federal Reserve and FDIC joint statement dated March 12, 2023 described measures allowing SVB depositors to access all their deposits from March 13. Protected bank deposits are distinct from tokens held by individuals in a market. This case does not establish that every future bank failure will receive the same intervention.
In a hypothetical urgent sale of 10,000 tokens at USD0.95, proceeds are USD9,500. A one-dollar exit on the next business day would provide USD10,000, but that comparison depends on recovery and eligibility. Consider the possibility of a further decline while waiting, when you need the funds, and trading costs. Having reserve assets does not mean being able to use their full value immediately.
Adding DAI did not remove shared collateral exposure
The Federal Reserve staff analysis also records a DAI depeg in March 2023. The Peg Stability Module then offered a route for exchanging USDC and other assets with DAI, creating a connection to USDC. It would be incorrect to say DAI maintained its peg throughout that event. Equally, this history does not determine its 2026 collateral composition or percentages.
To illustrate shared dependence, suppose you hold JPY600,000 of USDC and JPY400,000 of another token whose backing depends 50% on USDC. A simple allocation of backing gives JPY600,000 + JPY400,000 × 50% = JPY800,000. Holding two tokens in approximately equal amounts does not make their risks independent.
This JPY800,000 is neither DAI’s actual collateral ratio nor a forecast of a price loss. Redemption priority, overcollateralization, other assets and trading prices affect losses. When investigating, list custodian banks, collateral tokens, bridges and exchanges alongside token names, then identify the overlaps.
A restored dollar peg does not restore yen returns
Acquiring USD10,000 worth at JPY150 per dollar costs JPY1.5 million. Even if the token returns to one dollar, an exchange rate of JPY135 produces a yen value of JPY1.35 million, down 10%. At a token price of USD0.95 and JPY135 per dollar, the value is JPY1,282,500, down 14.5%. These hypothetical calculations exclude selling costs and taxes.
Money for next month’s yen rent requires a different kind of stability from money reserved for a dollar-denominated purpose. If yen living expenses are your benchmark, record peg movements, exchange rates and conversion costs separately. A weaker yen may raise the valuation, yet suspended redemptions can still leave the funds unavailable on the required date.
Check exits for each holding route
Check the official token name and network, provider, withdrawal destination, redemption eligibility, costs and required date, in that order. Do not give private keys to an unfamiliar “recovery desk”; keep official suspension notices and transaction histories. Separate a decision based on an expected price recovery from the task of securing living expenses.
| Scenario | Conditions to verify |
|---|---|
| Improvement | Access to reserves and normal redemptions recover |
| Stagnation | Backing is explained, but redemption access or market liquidity remains insufficient |
| Deterioration | Asset impairment or suspensions spread and exit options shrink |
Price, hacking and regulatory-change risks remain. When using services in Japan, check providers registered with the Financial Services Agency and the distinction between electronic payment instruments and crypto assets. Legal classification depends on structure and cannot be determined from the word stablecoin alone. This article does not recommend a purchase. Sources reviewed September 7, 2026.
References
3- Joint statement of March 12, 2023 (opens in a new tab) US Treasury, Federal Reserve and FDIC
- Do Kwon sentencing, December 11, 2025 (opens in a new tab) US Department of Justice
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