Circle Discontinues Support for USDC on Tron Blockchain Amid Risk Management Concerns

Circle Discontinues Support for USDC on Tron Blockchain Amid Risk Management Concerns

Crypto News – Circle, a centralized stablecoin issuer, has announced the cessation of its support for USD Coin (USDC) on the Tron blockchain, citing concerns within its risk management framework.

In a statement released on February 21st, the decision was grounded in the company’s dedication to upholding USDC’s integrity as a “trusted, transparent, and safe” asset for its user base. This strategic shift was described as part of a comprehensive, enterprise-wide approach involving various departments, including business organization and compliance, although specific details regarding the rationale or departments involved were not disclosed.

Consequently, Circle will cease minting USDC tokens on the Tron blockchain with immediate effect.

“Circle is discontinuing support for USDC on the TRON blockchain in a phased transition. Effective immediately, we will no longer mint USDC on TRON,” the statement affirmed.

While Circle pledges to assist its Circle Mint users in transferring their USDC to alternative blockchain networks until February 2025, clients have the option to redeem their USDC holdings for fiat currency directly through the issuer.

For retail USDC holders and non-Circle customers, a plethora of global services, including retail exchanges and brokerages, are available to facilitate the transfer of USDC between blockchains or conversion to fiat currency.

This decision follows Circle’s previous dissociation from allegations linking it to terror financing and Justin Sun, the founder of the Tron blockchain, with Circle confirming the termination of all accounts associated with Sun in February 2023.

USDC stands as the second-largest stablecoin by market capitalization. Recently, Circle disclosed plans for a public offering through a filing submitted to the Securities and Exchange Commission (SEC).

In response to Circle’s decision, Justin Sun expressed respect for developers’ choices, emphasizing that the Tron blockchain shares a decentralized structure akin to Bitcoin and Ethereum.

“We respect and support each developer’s development decisions and hope to encourage them to develop on TRON. Ultimately, TRON’s vision is to become the largest and most prosperous decentralized financial protocol in the world,” Sun stated.

Tron has emerged as one of the fastest-growing networks for stablecoin transactions, ranking as the second-largest network for stablecoins according to DeFillama data, accommodating approximately $52 billion worth of these assets. Despite Circle’s discontinuation of USDC support on Tron, the blockchain continues to host other stablecoins, with USDC currently holding the fourth position behind USDT, TUSD, and USDD on Tron, boasting $313 million in assets compared to USDT’s $49 billion.

However, recent reports from prominent international bodies such as the United Nations have raised concerns about the blockchain’s alleged involvement in illicit financial activities – an accusation Sun vehemently refutes.