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Circle Says Its USDC Stablecoin Won’t Support Ethereum Proof-of-Work Hardfork

UTC by Bhushan Akolkar · 2 min read
Circle Says Its USDC Stablecoin Won’t Support Ethereum Proof-of-Work Hardfork
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The top two stablecoin issuers – Circle and Tether – have distanced themselves from any hardfork in Ethereum. They said that they will continue to support the PoS transition of Ethereum.

As the Ethereum blockchain network seeks to undergo the Merge upgrade next month, there’s a new controversy brewing with hardforking the Ethereum network to keep the Proof-of-Work network alive. The miner community has been especially backing this idea of the hardfork. However, some prominent market players have distanced themselves from this idea. On Tuesday, August 9, USDC stablecoin issuer Circle noted that it shall only support Ethereum Proof-of-Stake (PoS) network after The Merge event on September 19.

In its official announcement on Tuesday, Circle noted:

“USDC has become a core building block for Ethereum DeFi innovation. It has facilitated the adoption of L2 solutions and helped broaden the set of use cases that today rely on Ethereum’s vast suite of capabilities. We understand the responsibility we have for the Ethereum ecosystem and businesses, developers and end users that depend on USDC, and we intend to do the right thing.”

Circle’s USDC is currently the world’s second-largest stablecoin with a market cap of $54.2 billion. US financial giants like BlackRock have been auditing and holding USDC reserves.

Furthermore, Circle said that it doesn’t expect any major issues to emerge from Ethereum’s transition to Proof-of-Stake. The stablecoin issuer noted:

“We do not anticipate disruptions to USDC on-chain capabilities nor to our fully automated issuance and redemption services. Circle’s testing environment is connected to the Goerli Ethereum testnet, and we will monitor closely as it merges with Prater in the coming days.”

Tether Joins Circle and Will Support Ethereum PoS

Circle’s immediate competitor and the world’s largest stablecoin issuer Tether also took a similar stand. As well as Circle, Tether said that its USDT stablecoin would support the Ethereum PoS transition. The official announcement noted:

“Tether believes that in order to avoid any disruption to the community, especially when using our tokens in DeFi projects and platforms, it’s important that the transition to POS is not weaponized to cause confusion and harm within the ecosystem”.

Ethereum co-founder Vitalik Buterin has strongly opposed the hardfork noting that proponents of its trying just to make a quick buck. He also said that he won’t be responsible for any problems that arise in the PoW version of Ethereum blockchain after the PoS transition is complete. “I’m sure there’s going to be problems… if they want to make a fork, it’s on them to mitigate those problems,” said Buterin.

Altcoin News, Blockchain News, Cryptocurrency news, Ethereum News, News
Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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