Circle names officials after USDC setback

The investors want ” derisking off from US “. This is one of the reasons given by Jeremy AllaireCEO of Circle to explain the fall drastic fall of the capitalization stablecoin USDC.

With the freezing of the BUSD by the authorities, theUSDC from Circle could have seen a significant increase in its capitalization. However, the second-largest stablecoin on the market is currently following the opposite trend.

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 registered a sharp decline, falling by 13 billion dollars. The USDC is now close to $30.7 billion in market cap.

The US banking crisis has taken its toll on the USDC

Stablecoin is a long way from its 2022 peak at $56 billion. But more importantly, the USDT of Tether has surged to climb to more than $80 billion. The token has widened its lead. A difficult situation for Circle’s CEO to accept, Jeremy Allaire.

For the executive, there are several reasons external to the stable token issuer for this decay dynamic.

We note that the American banking system causes strong concerns in the whole world”, he advances in particular on Bloomberg.

And in this environment, investors would work to reduce their exposure to the dollar and its banks. In recent months, Signature, Silicon Valley Bank and Silvergate have failed. The government had to step in to reimburse customers, including Circle.

A detrimental regulatory environment

There are other factors working against USDC, however, Allaire believes. “ We are concerned about the regulatory environment at United States “he also states – while Binance US has just given up on the acquisition of Voyager Digital for these same grievances.

The regulationAt the initiative of the SEC in particular, has taken a mainly repressive turn in recent months. The crypto industry, including Coinbase, which is suing the SEC, regrets a lack of legal clarity on digital assets.

It’s a critical time here in the United States, and as I like to say, it’s really time for Congress to act,” Jeremy Allaire urges, so he joins other crypto company bosses in his voice.

USDT a big winner among stablecoins

But are these different reasons enough to explain the current crisis that the USDC is going through? The leader of the sector, theUSDTseems to be unaffected by these same conditions, despite the fact that the stablecoin dollar functions in a similar manner.

However, with recurring criticism of the transparency of its reserves, Tether could be considered more at regulatory risk.

Still, its capitalization is approaching its 2022 ATH at about $81.5 billion. In August 2022, it was over $83 billion. In the same period, the USDC was already starting its descent.

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