By
Bhushan Akolkar
April 26th, 2024
The ongoing regulatory scrutiny of Tron (TRX) and Justin Sun by United States agencies has led to the end of an era of Circle’s USDC in TRC20 standard.
Binance, the leading cryptocurrency exchange by daily traded volume and registered users, has announced that it will cease the support for USDC, the flagship Stablecoin for Circle Internet Financial Ltd, by April 5. The decision to end the support for USDC deposits and withdrawals through the TRC20 standard follows the prior announcement by Circle that customers have until February 2025 to migrate their USDC coins to other supported chains.
“Deposits of USDC tokens via TRC20 will no longer be credited to users’ accounts after 2024-04-05 02:00 (UTC),” Binance noted.
Meanwhile, Binance noted that its customers can continue trading Circle’s USDC through the supported chains as they migrate their coins from TRC20 standards.
Major Blow to the Tron (TRX) Web 3.0 Ecosystem
The palpable growth of the web3 ecosystem has been bolstered by the existence of programmable highly liquid stablecoins led by Tether (USDT) and Circle’s USDC. According to market data provided through DefiLaama, the Tron network is the second largest Web 3.0 ecosystem after Ethereum with about $9.68 billion in Total Value Locked (TVL) and more than $53 billion in stablecoins market cap.
With Circle touted as the most transparent and liquid stablecoin for the Web 3.0 ecosystem, Tron’s Web 3.0 ecosystem is expected to feel the blow as other layer-one blockchains continue to thrive.
Moreover, the ongoing competition in the layer one industry has resulted in the rise of Solana (SOL) among others as a major competitor to legacy chains like Ethereum and Tron. Nonetheless, the Tron network significantly benefits from Tether’s USDT support amid the ongoing adoption of real-world assets (RWA) tokenization.
Regulatory Hurdles
Following the historic settlement between the United States and Binance late last year, the US-based regulators have been probing Tron Foundation and its founder Justin Sun. As Coinspeaker previously reported, the United States Securities and Exchange Commission (SEC) has been investigating Sun and his companies for selling unregistered securities assets via TRX and BitTorrent (BTT).
Consequently, the Tron ecosystem has been operating its services excluding the United States to avoid altercations from the regulatory agencies.
Market Check
The Tron network has thrived in the past without venturing into the United States, thus its native token TRX did not take a nose dive on the announcement. According to our latest market data, TRX’s price has dropped around 14 percent in the past four weeks amid the Bitcoin-led crypto correction.
Nonetheless, the Tron ecosystem led by Sun has huge growth prospects, backed by the positive diplomacy obtained while he served as Permanent Representative of Grenada to the World Trade Organization (WTO) in Geneva.