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US Crypto Regulatory Crackdown Affected USDC, Circle CEO

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Right at the heels of the U.S. banking crisis and regulatory crackdown, the market capitalization of the USDC, which is a Circle-issued stablecoin, declined by almost half over the last 6 months.

Jeremy Allaire, Circle’s CEO, faults the U.S. regulator for being the major cause of the decreasing market cap of its stablecoins, USDC.

The CEO’s statement came amid the tight regulatory inspection which followed the banking crisis.

Details of the Story

US

Source: freepik

In Allaire’s interview on April 26, he commented that the international market is greatly concerned because of the United States banking system.

Also, there is a huge show of concern globally due to the United States regulatory environment, says Circle’s Chief.

READ ALSO: South Korea Charges Terra Co-Founder, But He Denies It

He went further to say that in March, the USDC depegged due to the United States banking crisis.

“After all, up to $3.3 billion of Circle’s worth of USDC, which was reserved in the collapsed Silicon Valley Bank, was lost after the regulators shut down the bank,” says Circle’s Chief.

During the Silicon Valley Bank collapse, Circle made a promise to its customers. The exchange told its customers that they have investors’ support, which can fill the gap.

Despite the assurance, the market reacted with a selling spree after hearing the news of the SVB collapse, causing the depegging of the USDC from the United States dollar.

US

Source:Coinmarketcap

Formerly, the USDC had a market capitalization of $56 billion at the peak and followed Tether-issued USDT.

But then, following the banking failures and the depegging of the USDC, the stablecoins market capitalization is reduced almost in half. At present, its market cap is at $30.7 billion.

READ ALSO: The Most Famous and Expensive Non-fungible Tokens

 Fast Facts

Coinbase is warning that the improper clarity of the regulations is likely to drive cryptocurrency companies to go offshore for opportunities.

Moreover, Allaire believes that due to the current MiCA (Markets in Crypto-Assets Act) by the EU Parliament as well as Hong Kong’s push for its adoption, the United States may be abandoned.

He advises that the United States Congress step up due to the critical environment. Since the US was rocked, issuer Circle’s USDC has experienced loss, unlike its rival USDT, after the banking crisis.

Allaire is speaking out for the investors desiring to “de-risk” out of the United States.

 

 

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