Circle Decides to Stop Printing USDC on TRON: What Impact Will It Have on Stablecoins?

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Bittime - USD Coin (USDC) is one of the most popular stablecoins in the crypto world, offering stability in value by tying the price of one USDC to one US dollar. However, the stablecoin recently underwent a major change, as its issuer, Circle, announced that it would stop support for USDC on the Tron blockchain. What is the reasoning behind this decision, and what are the implications for USDC users?

What is USDC?

USDC is a stablecoin backed by a reserve of assets in the traditional financial system, such as cash, cash equivalents, or securities. USDC is a TRC20-based token issued by Tether with the fastest additional emission and very low handling fees, which enjoys great popularity among users from the first day of its issuance. USDC is designed to always be exchangeable for US dollars in a 1:1 ratio. Each outstanding unit of USDC is backed by $1 held in reserve, in the form of a mix of cash and short-term U.S. Treasury bonds.

USDC has several advantages over other stablecoins, such as transparency, compliance, and availability. Circle, along with Coinbase, is a founding member of the Centre consortium, which is responsible for the issuance and regulation of USDC. Centre claims that USDC is a regulated and fully backed up stablecoin. USDC reserves are held in regulated financial institutions and audited periodically by independent accounting firms. In addition, USDC adheres to strict anti-money laundering (AML) and customer knowledge (KYC) standards, and coordinates with regulators and regulatory authorities.

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Why Circle Stopped Printing USDC on Tron

On February 20, 2024, Circle announced via its official blog that it would discontinue support for USDC on the Tron blockchain. This means that Circle will no longer mint new USDC tokens on Tron, which is one of the blockchains that support USDC since 2020. However, Circle will still support the transfer of USDC already on Tron for their business customers through the "Circle Mint" service until February 2025, allowing them to move their USDC holdings to another blockchain, such as Ethereum or Solana.

For retail users, Circle advises them to use "hundreds of available global services, including retail exchanges, brokers, and on/off-ramp providers, to transfer USDC between blockchains or exchange their USDC for fiat currency". Circle also promises that they will continue to innovate and improve the USDC user experience across various blockchains, including new and evolving.

Circle did not explicitly mention the reason why they stopped support for Tron, but mentioned that this decision is part of their ongoing efforts to ensure "USDC remains trusted, transparent, and secure". Circle also stated that they routinely assess all blockchains that support USDC as part of their risk management strategy, and that these decisions involve various departments within the company, including business, compliance, security, engineering, and others.

Some analysts and crypto watchers speculate that the reason Circle is stopping support for Tron may be related to several factors, such as:

Regulation 

Circle mungkin ingin mempersiapkan diri untuk menghadapi regulasi yang semakin ketat terhadap stablecoin, terutama di AS, di mana Menteri Keuangan Janet Yellen baru-baru ini menyerukan kerangka kerja federal untuk stablecoin. Dengan mengurangi jumlah blockchain yang mendukung USDC, Circle mungkin ingin memudahkan proses audit dan kepatuhan, serta mengurangi risiko hukum dan reputasi. Selain itu, Circle juga berencana untuk melantai di bursa saham melalui merger dengan perusahaan cek kosong (SPAC) bernama Concord Acquisition Corp, yang membutuhkan persetujuan regulator.

Kinerja 

Circle mungkin ingin meningkatkan kinerja dan efisiensi USDC dengan beralih ke blockchain yang lebih cepat, murah, dan ramah lingkungan, seperti Solana, yang diklaim dapat memproses lebih dari 50.000 transaksi per detik dengan biaya kurang dari $0,01 per transaksi. Sebaliknya, Tron mungkin dianggap kurang unggul dalam hal kecepatan, biaya, dan konsumsi energi, dibandingkan dengan blockchain lain yang mendukung USDC.

Reputasi 

Circle mungkin ingin menjaga reputasi dan citra USDC sebagai stablecoin yang terpercaya, transparan, dan aman, dengan menghindari asosiasi dengan Tron, yang sering dikritik karena berbagai kontroversi, seperti tuduhan plagiat kode sumber, pelanggaran hak cipta, dan manipulasi pasar. Pada November 2020, Circle membantah klaim bahwa mereka menyediakan layanan kepada pendiri Tron, Justin Sun, yang dituduh mencoba mempengaruhi hasil pemilihan presiden AS dengan membeli suara menggunakan USDC.

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Dampak bagi Pengguna USDC

Keputusan Circle untuk menghentikan dukungan untuk USDC di Tron mungkin memiliki dampak positif dan negatif bagi pengguna USDC, tergantung pada preferensi dan kebutuhan mereka. Beberapa dampak yang mungkin terjadi adalah dampak positif dan dampak negatif:

Dampak Positif

Pengguna USDC mungkin mendapatkan manfaat dari peningkatan kepercayaan, transparansi, dan keamanan USDC, yang dapat meningkatkan adopsi dan permintaan USDC di pasar kripto.

Pengguna USDC juga mungkin dapat menikmati pengalaman pengguna yang lebih baik, dengan transaksi yang lebih cepat, murah, dan ramah lingkungan, dengan beralih ke blockchain lain yang mendukung USDC, seperti Solana.

Pengguna USDC juga mungkin dapat mengakses lebih banyak layanan dan produk kripto yang tersedia di blockchain lain, seperti dApps, DeFi, dan NFT, yang mungkin tidak tersedia atau terbatas di Tron.

Dampak Negatif

Pengguna USDC mungkin mengalami kesulitan, biaya, atau risiko dalam mentransfer USDC mereka dari Tron ke blockchain lain, terutama jika mereka tidak memiliki akses atau pengetahuan yang cukup tentang layanan atau platform yang diperlukan.

Then, USDC users may also miss out on some advantages or opportunities offered by Tron, such as incentive programs, communities, or partnerships, which may not exist or differ in other blockchains. USDC users may also have to adapt to changes or uncertainties that may occur due to Circle's decisions, such as price fluctuations, liquidity, or demand for USDC in the crypto market.

Conclusion

Circle, the issuer of the USDC stablecoin, has announced that it will discontinue support for USDC on the Tron blockchain considering various possibilities regarding the impact of crypto regulation in the US and Circle has decided not to continue its relationship with TRON.

How to Buy USD Circle (USDC) Stablecoin on Bittime

You can buy and sell USD Circle (USDC) in an easy and safe way through Bittime. Bittime is one of the best crypto applications in Indonesia that has been officially registered by Bappebti.

USD Circle (USDC) is available on Bittime with the USDC/IDR market pair. To be able to buy USDC IDR on Bittime, make sure you have registered and completed identity verification. In addition, also make sure that you have enough balance by depositing some funds into the wallet. For your information, the minimum asset purchase at Bittime is Rp10,000. After that, then you can make a crypto asset purchase in the application.

Learn the complete guide on how to buy USDC on Bittime.

Monitor the price chart movements of USDC, Bitcoin (BTC), Ethereum (ETH), Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.

Also Read:

USDT vs USDC: Understanding the Difference Between the Two

Dollar Digital USD Coin (USDC) Review: Complete Guide 2024

Circle CEO predicts regulation of stablecoins in the US

DISCLAIMER: This article is informational in nature and does not constitute an offer or solicitation to sell and buy any crypto asset. Trading crypto assets is a high-risk activity. The price of crypto assets is volatile, where prices can change significantly from time to time and Bittime is not responsible for fluctuations in the exchange rate of crypto assets.