USDC-Issuer Circle CEO Hints At US Exit

According to Circle CEO Jeremy Allaire, the declining market value of USD Coin (USDC) stablecoin is being caused by regulatory pressure and skepticism towards the cryptocurrency market. Allaire stated that investors are seeking to minimize their exposure to the US due to the unclear regulatory environment in the country.

USDC Issuer Circle CEO Hints At US Exit Amid Regulatory and Banking Woes

The market value of USDC stablecoin has been declining since mid-2022 and fell to $30.6 billion as of today. Meanwhile, other stablecoins like Tether (USDT) saw their market value recover above $81 billion due to the market rally this year. Circle CEO Jeremy Allaire pointed out during an interview with Bloomberg Television on April 26 that the US banking system and regulatory environment are causing global concerns.

USDC stablecoin reserves are mainly backed by US treasuries and cash deposits. However, during the banking crisis, USDC depegged from the US dollar when US regulators shut down three crypto-friendly banks: Silvergate, Silicon Valley Bank, and Signature, under Operation Choke Point 2.0.

USDC stablecoin is losing support from crypto exchanges, companies, and investors due to its compliance with the U.S. Office of Foreign Assets Control (OFAC). Circle froze USDC in blacklisted wallet addresses after OFAC sanctioned crypto mixers such as Tornado Cash. Stablecoins have come under increased scrutiny from regulators following recent crises such as the Terra-LUNA crisis and the FTX fallout, leading to several U.S.-based crypto companies and exchanges leaving the country.

In response to the regulatory challenges in the U.S., Circle Internet Financial has applied for regulatory approval in France for its European expansion. With the approval of the European Union's Markets in Crypto-Assets (MiCA) regulation, Circle plans to expand its presence and regulatory engagement across the European market.

NY Fed Policy Change Impacts Circle Fund

The New York Federal Reserve has updated its policy regarding counterparties for market operations and reverse repurchase agreements, which resulted in Circle's USDC reserve fund, managed by BlackRock, becoming ineligible for the program. The updated policy only allows traditional financial institutions to be eligible for the reverse repurchase program, effectively excluding stablecoins from accessing it.

To put it simply, the changes in the New York Fed's eligibility requirements have made Circle's USDC reserve fund ineligible for the reverse repurchase program, which is now only available to traditional financial institutions.

Looking for more information about cryptocurrencies？ WikiBIT offers you a one-stop service! Not only can you access numerous hot news topics, but you can also search for relevant trading firms and obtain their information, such as their ratings, user reviews, and whether they are regulated. Additionally, you can also use WikiBIT to keep up with the latest market trends of various digital currencies.

Don't hesitate any longer - download WikiBIT now and experience its features for yourself!

As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!