The creator of USDC, the second-largest stablecoin with a market capitalization of approximately $24.7 billion, announced that it will only support professional institutional accounts.
In a strategic move to review its relationship with customers, circleA leading and regulated stablecoin issuer informed its personal account holders that they will not be served until the end of this month. Circle wrote an email to its individual customers informing them that they should redeem their coins before November 30, as only institutional and business account holders will be served. The company highlighted that the recent action to close individual accounts is in line with its specific terms in the applicable legal agreement.
As a result, account holders with no active balance do not need to take any further action, but can still reach out to customer service directly for further assistance. According to the Circle email shared by X Platform user Evans6, the company may be cracking down on individual accounts due to regulatory pressure, as it is SEC compliant.
Is the circle breaking? pic.twitter.com/KwvX9sz0xp
– Evans6 (@Evan_SS6) 31 October 2023
Without a formal explanation as to why Circle personal accounts would be closed by the end of this month, the room for speculation was wide. For example, popular crypto enthusiast and analyst Adam Cochrane suggested that stablecoin issuers are acting to prevent withdrawals of their reserves from individuals suspected of conducting money laundering activities.
“Honestly my personal bet is that the TUSD/USDT rotation into USDC that is draining their reserves came from the network of consumer accounts – which is why it can’t be mitigated. KYC mules are not exactly a new concept – so I wouldn’t be surprised if this is a strategic compromise here,” Cochrane. noted,
A closer look at Circle and the stablecoin industry
The stablecoin industry has been significantly infiltrated by institutional investors looking to venture into global markets through blockchain technology. Circle partnered with blackrock inc (NYSE:BLK) and Bank of New York Mellon Corporation (NYSE:BK), has become a globally recognized stablecoin issuer with a variety of products. However, the company has bet that its products are for DeFi applications and institutions looking to transfer funds seamlessly around the world.
As of reporting time, Circle offered multiple products including USDC, EuroC, cross-chain transfer protocols, programmable wallets, and a smart contract platform. was the leading product usdc With a market capitalization of approximately $25 billion and approximately 1.8 million holders, it facilitated a 24-hour trading volume of approximately $4 billion. In the last year, Circle issued $124.9 billion and its customers redeemed $143.7 billion.
As for EURC, it is currently available on Ethereum, Avalanche, and Stellar networks. Notably, EURC had a total market capitalization of approximately €50.9 million. Meanwhile, Circle is facing intense competition from Tether (USDT) as more and more countries prepare to launch and roll out their respective CBDC,
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