No Questions Asked: Effects of Transparency on Stablecoin Liquidity During the Collapse of Silicon Valley Bank

The Silicon Valley Bank collapse revealed counterintuitive dynamics in stablecoin markets regarding transparency effects. This research analyses USDC and USDT liquidity pools on Uniswap during the SVB crisis, adapting the Marginal Cost of Immediacy measure for automated market makers and conducting Difference-in-Differences analysis. 

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The findings reveal that USDC's frequent and detailed disclosures led to swift market reactions, whilst USDT's opacity and less frequent reporting provided a safety net against immediate impacts, demonstrating flight-to-safety behaviour where transparency paradoxically increased vulnerability.