Sky’s $4.4 billion liquidity disclosure shows why USDS cash-outs need a separate bank route
Summary
Sky reported more than $4.4 billion in stablecoin liquidity in its Peg Stability Module, which lets users swap USDS and USDC one-for-one using existing protocol inventory. The figure does not guarantee that the PSM holds the same amount of USDC available for an exit at any given time, and swaps or routed trading volume do not prove new dollar inflows or USDS issuance. Token supplies can also rise through collateral-backed borrowing or migration from legacy tokens, without new bank deposits. USDD conversions similarly depend on available target-token inventory. Turning USDS into USDC is separate from redeeming USDC for bank dollars, a process subject to issuer eligibility and banking requirements.
