Stablecoin issuer Circle has unveiled plans to discontinue the minting of its USDC stablecoin on the TRON blockchain and, eventually, cease support for USDC on TRON altogether.
Immediate Halt to USDC Minting on TRON
The Circle team, in a blog post released on Tuesday, conveyed that, effective immediately, the minting of USDC on TRON would cease. Furthermore, they announced that Circle would facilitate the transfer of USDC to other blockchains for Circle Mint customers until February 2025.
Transitional Support for Circle Mint Customers
During the transitional period until February 2025, Circle Mint customers, utilizing the firm’s minting and redemption tool for institutions, will have the option to transfer USDC to alternative blockchains or redeem USDC on TRON for fiat currency directly through Circle.
Options for Retail Holders of USDC on TRON
Retail holders of USDC on TRON are not left without options. They can leverage crypto exchanges, brokerages, and other on/off-ramp providers to transfer their stablecoins between blockchains or redeem USDC for fiat currency.
Enterprise-Wide Decision and Rationale
Circle attributed the decision to discontinue support for USDC on TRON to an enterprise-wide approach involving various functions across the company, including business organization and compliance. The objective is to ensure that USDC maintains its reputation for trustworthiness, transparency, and safety, positioning it as the leading regulated digital dollar on the internet.
Contextual Background: Addressing Terrorism Financing Allegations
This move comes in the wake of allegations linking Circle to terrorist financing, which the company vehemently refuted a little over two months ago. A non-profit watchdog group, Campaign for Accountability (CfA), had raised concerns about Circle’s involvement with the Palestinian Islamic Jihad (PIJ) and TRON founder Justin Sun. Circle clarified that neither Sun nor any entity under his control had accounts with Circle, and all his accounts were terminated in February.
Regulatory Landscape and IPO Considerations
Circle’s recent filing for an initial public offering (IPO) in the U.S. has also played a role in shaping its decisions. To maintain favorable standing with regulators, the company appears to be strategically adjusting its support for USDC on TRON, aligning with broader regulatory considerations.
November Incident: TrueUSD Peg Loss
In a related incident from November, TrueUSD (TUSD), an Ethereum-based stablecoin associated with TRON founder Justin Sun, experienced a loss of its peg to the U.S. dollar. Reports suggested that terrorists favored TRON over the Bitcoin blockchain for fund transfers.
Circle’s decision to discontinue support for USDC on TRON reflects a calculated response to regulatory dynamics and business considerations, ensuring the stability and integrity of its stablecoin in the evolving digital financial landscape.