Using stablecoins involves certain risks, including USDB (a USD-pegged stablecoin issued by Bridge, a Stripe company). Learn more: What is USDB?
General Risks of Using Stablecoins
Using stablecoins involves certain risks:
Blockchain risks: Network congestion, smart contract bugs, or forks may delay transfers.
Regulatory risks: Local laws or policies may change and affect service availability.
Market risks: A stablecoin’s price could temporarily deviate from 1 USD.
Technology risks: Outages or cyberattacks could impact processing.
You are responsible for providing accurate wallet information and complying with local regulations when using the service.
Risks of Holding Stablecoins in Your Wallet
When you hold a stablecoin balance in your wallet, you are exposed to additional risks beyond those of a single transfer:
Not FDIC insured: As a financial technology company, not a bank, GrabrFi is not FDIC insured. Stablecoins sent via GrabrFi are not bank deposits and are not covered by pass-through FDIC insurance, which only applies to the money in your USD checking account held at Regent Bank, Member FDIC, subject to certain conditions. See: Is My Stablecoin Balance FDIC Insured?
Issuer risk: The value of your stablecoins depends on the issuer (Bridge for USDB, Circle for USDC) maintaining sufficient reserves and operational integrity. In the unlikely event of issuer insolvency, your balance could be affected.
De-peg risk: While stablecoins are designed to maintain a 1:1 peg to USD, temporary or permanent de-pegging events can occur due to market conditions, regulatory actions, or issuer issues.
Custody risk: Your wallet is custodied by Bridge Building Arx LLC. While you own the stablecoins, Bridge holds the private keys. Your access depends on GrabrFi and Bridge remaining operational.
Clarification on Transfer vs Holding Risks
Note: The risks described in the “Holding Stablecoins” section apply when maintaining a stablecoin balance over time.
For individual send or receive transactions, the primary risks remain:
Blockchain irreversibility
Sending to incorrect wallet addresses
Network congestion or technical issues
Cryptocurrency transactions are irreversible once confirmed on-chain.