Jeremy Allaire, CEO of Circle, attributed the decline in the market capitalization of USDC, a popular stablecoin, to the U.S. government’s crackdown on crypto regulations. He believes that increasing regulatory pressure has led to a decline in the use of USDC in some parts of the world.
The USDC, which is pegged to the U.S. dollar, has become an increasingly popular choice for crypto investors looking for a stable store of value amid the volatility of other cryptos. However, over the past few months, the market capitalization of the USDC has declined, causing concern among investors and market watchers.
With the BUSD frozen by the authorities, Circle’s USDC could have seen a significant increase in capitalization. However, it is the opposite trend that the market’s second stablecoin is currently following.
Since its recent loss of parity with the dollar as a result of the banking crisis in the United States, the token’s capitalization has fallen sharply, down by $13 billion. USDC is now close to $30.7 billion in market cap.
Stablecoin is a far cry from its 2022 peak at $56 billion. More importantly, Tether’s USDT has surged to over $80 billion. The token has widened its lead. A difficult situation for Circle’s CEO Jeremy Allaire to accept.
USDC, concerned about the regulatory environment in the US!
For the executive, there are several reasons outside of the stablecoin issuer that explain this downward dynamic.
We note that the American banking system raises serious concerns throughout the world,” he says on Bloomberg.
And in this context, investors would try to reduce their exposure to the dollar and its banks. In recent months, Signature, Silicon Valley Bank and Silvergate have failed. The state had to step in to reimburse customers, including Circle.
Other factors weigh against the USDC, however, Allaire believes. “We’re concerned about the regulatory environment in the U.S.,” he also says – even though Binance US just walked away from the Voyager Digital acquisition over those same grievances.
Regulation, led by the SEC in particular, has taken a mostly repressive turn in recent months. The crypto industry, including Coinbase, which is suing the securities regulator, laments a lack of legal clarity on digital assets.
At the time of writing, the price of USD Coin is $0.999988 USD with a 24-hour trading volume of $4,928,193,985 USD with a market capitalization of $30,687,423,962 USD.
Image Source : The Block
Written by Laeti Marison (SatoshiBelle)
