When a stablecoin's market price meaningfully diverges from its intended peg.
A depeg is any material and sustained deviation of a stablecoin's market price from its target. Small intraday wobbles are normal — anything within 20–30 basis points on a busy trading day is inside expected range. A depeg becomes serious when the market believes the peg cannot be restored: reserves are inadequate, the mint/redemption mechanism has broken, or the issuer has become uncooperative. Notable depeg events include UST (May 2022), USDC (March 2023, during the Silicon Valley Bank collapse), and various algorithmic-stablecoin failures.