What would happen to cryptocurrency if the U.S. federal bank decided to deny the exchange of any cryptocurrency for USD?

It is not the US Fed (federal reserve) which exchanges crypto to USD but the commercial bank which has the fiat holdings of stable coin issuers.

For ex. for USDC / Circle it is Silvergate bank.

The total amount of fiat held by bank of stable coin issuers is less than $100 billion , but the total crypto market cap is $2+ trillion.

In case of mass movement to cash out from crypto to fiat it will be the commercial banks who will decide to deny exchange of crypto to fiat - it order to preserve some of their holdings.

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