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Circle pulls plug on USDC in major Tron exodus

TL;DR

  • Circle, the issuer of the US dollar-pegged stablecoin USD Coin, has announced that it will suspend support for the token on the Tron network.
  • In a blog post, the entity states, “Effective immediately, we will no longer mint USDC on TRON. Circle will support Circle Mint customers’ transfer(s) of USDC to other blockchains through February 2025.”
  • Circle said it “continually assesses the suitability of all blockchains” as part of its risk management approach but did not explain why it stopped supporting Tron.

Circle, a prominent crypto firm, has recently announced its decision to cease support for the USD Coin (USDC) stablecoin on the Tron blockchain. This strategic pivot marks a significant shift in Circle’s operations and underscores important considerations within the crypto industry. 

The move to halt USDC minting on Tron comes amidst risk management concerns and a broader effort to ensure compliance and stability. This decision reflects Circle’s commitment to maintaining the integrity and security of the USDC stablecoin, which plays a vital role in the broader crypto ecosystem.

Circle cuts ties with Tron for USDC

Circle, the issuer of the US dollar-pegged stablecoin USD Coin, has announced that it will terminate support for the token on the Tron blockchain, citing “efforts to ensure that USDC remains trusted, transparent, and safe.”

“Effective immediately, we will no longer mint USDC on TRON,” Circle wrote in a Feb. 20 blog post, adding that it will gradually phase off support for the blockchain network. Circle stated that it would continue to support its Circle Mint business customers’ USD Coin transfers to other blockchains until February 2025. The press release states that:

The crypto entity is discontinuing support for USDC on the TRON blockchain in a phased transition. Effective immediately we will no longer mint USDC on TRON. Circle will support Circle Mint customers’ transfer(s) of USDC to other blockchains through February 2025.

As Circle only serves business and institutional customers, retail users and other non-Circle customers can move their USDC on TRON to an exchange or distributor where it can be transferred to another blockchain where USDC is supported.

Circle Announcement

Stablecoins are digital tokens that have a fixed value and are backed by traditional currencies.

The crypto entity did not provide an explanation for its decision, but stated that as part of its risk management strategy, it “continually assesses the suitability” of blockchains that support USDC, the second-largest stablecoin after Tether.

Circle, which announced in January that it was filing for a U.S. IPO, deleted accounts held by Tron founder Justin Sun and his connected firms last year.

Sun, a well-known crypto pioneer, was sued by the Securities and Exchange Commission last year for allegedly manipulating trading volumes and marketing Tron tokens as unregistered securities. Sun stated that the SEC charges “lack merit.”

USDC and Tron market situation

The crypto entity denied providing services to Tron founder Justin Sun in November 2023, stating that it had not done so since February 2023, when an ethics organization wrote to US Senators suggesting the firm was “compromised by its integration” with the Tron network.

According to the Campaign for Accountability, Tron “has been named in multiple international law enforcement actions involving billions of dollars in transactions by alleged organized crime groups and sanctioned entities.”

The crypto entity filed for a US IPO in January. Its USDC stablecoin has a market capitalization of roughly $28 billion, trailing only its rival stablecoin Tether, which has a valuation of $97.5 billion, according to CoinGecko.

Data shows that the distribution of USDC across other blockchains is heavily skewed towards Ethereum, which hosts more than $22 billion of the entire circulating supply. Solana is next, with $1.4 billion, followed by Polygon with $530 million. In comparison, Tron accounts for only $313 million of USDC’s overall market presence.

The decision follows USDC’s difficult first quarter of 2023, which saw bank runs and a banking crisis affecting numerous significant financial institutions, including Silicon Valley Bank. More than a year later, the crypto entity is focused on expanding in Europe, seeking important licenses to boost its market position.

It stated that institutional clients can move USDC stored on Tron to other blockchains or redeem their tokens for traditional cash until February 2025. Retail users can move USDC to other blockchains and redeem it via crypto exchanges and brokerages, the company said.

The company cut off a chunk of its personnel last year during a bad market triggered by the failures of FTX, Celsius, and Three Arrows Capital.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Florence Muchai

Florence is a crypto enthusiast and writer who loves to travel. As a digital nomad, she explores the transformative power of blockchain technology. Her writing reflects the limitless possibilities for humanity to connect and grow.

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