Circle announces the cessation of USDC support on the Tron blockchain, citing ongoing risk assessments and an enterprise-wide approach in alignment with regulatory standards.
Circle's Decision and Rationale
Circle, the issuer of the widely-used USD Coin (USDC), has announced its decision to discontinue support for the stablecoin on the Tron blockchain. The move, outlined in a blog post on February 20, marks a strategic shift in Circle's approach towards ensuring the integrity and safety of USDC. According to Circle, the decision aligns with its commitment to maintaining USDC as a trusted, transparent, and safe digital dollar.
The Circle team stated,
"Circle is discontinuing support for USDC on the TRON blockchain in a phased transition. Effective immediately we will no longer mint USDC on TRON."
Enterprise-wide Approach
While the announcement did not explicitly cite reasons for the withdrawal, Circle emphasized its ongoing assessment of blockchain networks supporting USDC under its risk management framework. The decision to withdraw USDC support from Tron was reached following a comprehensive evaluation involving various departments within Circle.
The company stressed that this action underscores its dedication to upholding USDC's reputation as a regulated digital dollar of choice on the internet. Circle underscored that this decision is part of a broader enterprise-wide approach aimed at maintaining the integrity and trustworthiness of USDC.
Transition Plan and Timeline
Circle outlined a phased transition plan, indicating that it would cease minting USDC on the Tron blockchain with immediate effect. However, the company assured its Circle Mint business customers of continued support for USDC transfers to other blockchains until February 2025. Additionally, Circle urged retail users and non-Circle customers holding Tron-based USDC to transfer their holdings to exchanges supporting USDC on alternative blockchain networks.
Market Impact and Background
USDC, the eighth-largest cryptocurrency by market capitalization, holds a significant position in the stablecoin market, with a market capitalization nearing $28 billion. Notably, Tron hosts USDC worth $335 million, according to data from the Circle website.
Circle's decision to withdraw support from Tron comes amidst its filing for public listing in the United States earlier in January. There have also been allegations linking its services to Tron founder Justin Sun. The SEC had raised concerns about Tron's involvement in international law enforcement actions and its association with entities designated as terror organizations by various countries.
In response to claims made by the Campaign for Accountability group, Circle clarified that it ceased providing services to Tron in February 2023.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
