By
Bhushan Akolkar
April 26th, 2024
Circle’s decision also follows previous controversies surrounding its alleged connections with Tron founder Justin Sun.
Circle, the company behind the US dollar-pegged stablecoin USD Coin (USDC), has announced its decision to discontinue support for the token on the Tron blockchain. The move comes as Circle seeks to ensure the integrity and security of USDC, aligning with its commitment to maintaining trust and transparency within the crypto ecosystem.
Circle’s Strategic Move
Circle revealed its plan for a phased transition away from USDC support on Tron, stating:
“Effective immediately, we will no longer mint USDC on TRON.”
While customers will still be able to transfer USDC to other blockchains until February 2025, retail users and non-Circle customers are encouraged to move their TRON-based USDC to exchanges facilitating transfers to blockchain networks where USDC remains supported.
The company stated that it would continue supporting its business customers’ USDC transfers to other blockchains until the aforementioned deadline. Circle cited an “enterprise-wide approach” as the driving force behind the decision to withdraw support for USDC on Tron. The company emphasized the importance of maintaining USDC’s reputation for trust, transparency, and safety, aligning with its efforts to uphold regulatory compliance and ensure stablecoin’s integrity.
Circle’s decision comes amidst its recent filing for an Initial Public Offering (IPO) in the United States. The company stated in an earlier report by Coinspeaker that the IPO will take place once the US Securities and Exchange Commission (SEC) completes its examination, subject to market and other variables.
With USDC commanding a market capitalization of nearly $28 billion, second only to Tether (USDT), according to data from CoinGecko, the decision to discontinue support for USDC on Tron could have broader implications for the stablecoin market.
Past Allegations On Circle and Ethical Concerns
Circle’s decision also follows previous controversies surrounding its alleged connections with Tron founder Justin Sun. Allegations raised by ethics groups regarding Circle’s integration with the Tron network prompted scrutiny, despite Circle’s denial of providing services to Sun since February 2023. Concerns over Tron’s involvement in international law enforcement actions and allegations of offering unregistered securities further complicated the issue.
In December, the Campaign for Accountability (CfA) also accused Circle of using USDC to fund terrorism and money laundering. Circle, through its Chief Strategy Officer and Head of Global Policy, Dante Disparte, reacted to the authorities in an official letter, disputing the CfA’s claims.
Stablecoins like USDC play a vital role in the crypto market, providing stability by pegging their value to fiat currencies like the U.S. dollar. Data from DefiLlama reveals that the majority of USDC supply exists on the Ethereum blockchain, with smaller amounts on alternative networks such as Solana, Polygon, and Tron.
As the USDC transition away from Tron unfolds, investors and stakeholders will be closely monitoring its implications on both the Tron network and the stablecoin market as a whole.
In the meantime, Tron’s native cryptocurrency TRX remains resilient, trading at $0.1399, with a market capitalization of $12.3 billion, highlighting the network’s robustness and continued relevance within the crypto space.