USDC: The Stablecoin That’s Weathering the Storm of the US Banking Crisis
Circle is bullish about its future prospects despite recent liquidity challenges caused by the US banking crisis in March 2023. Circle transferred its SVB funds to Bank of New York Mellon shortly after, mitigating potential risks.
Circle, the issuer of USDC, remains confident about its future despite recent liquidity challenges caused by the collapse of Silicon Valley Bank (SVB).
In March 2023, during the US regional banking crisis, Circle faced substantial redemptions due to fears and uncertainties over its reserves at SVB. The company transferred its SVB funds to the Bank of New York Mellon, effectively averting potential risks.
Jeremy Allaire, CEO of Circle, is optimistic that the company will have a competitive edge once the US establishes a clear regulatory framework.
US lawmakers are currently trying to classify cryptocurrencies as either securities or commodities through a draft proposal. The lack of extensive regulations has made the crypto market ecosystem difficult to navigate.
Recent legal actions against prominent companies like Binance and Coinbase have stirred concerns about potential bias from US regulators, particularly the Securities and Exchange Commission (SEC), against non-US crypto businesses. There is speculation that USDC, a stablecoin, might receive more favorable treatment from the US government compared to its main competitor, Tether (USDT).
Allaire stresses that Circle’s steadfast adherence to financial regulations will eventually give USDC a competitive advantage.
Commenting on a recently proposed stablecoin bill in the US House of Representatives, Allaire said, “With a bill like this, we’ll end up doing more business with banks than we currently do.” He believes that as banks may not be licensed to operate in the digital assets industry, USDC could directly compete with traditional US banks.
Since its establishment in 2013, Circle has demonstrated a strong commitment to regulatory compliance. The company has been approved to operate in Singapore and holds a money transmitter license in 48 US areas.
Recently, the Monetary Authority of Singapore (MAS) granted Circle’s Singapore division a Major Payment Institution (MPI) license, which further strengthens its regulatory standing. Circle has taken further steps by applying for a license in France. They hope to gain recognition as an electronic money institution and a digital asset service provider, though they are still waiting for approval.
Circle’s proactive measures during the ongoing banking crisis highlight its strategic approach to securing its market position. By presenting USDC as a stablecoin that complies with financial regulations, Circle hopes to secure a substantial market share.
- The California Department of Financial Protection closed Silicon Valley Bank on Friday, March 10, after $42 billion were withdrawn by VC funds and their clients. Circle, the issuer of USDC, announced on Friday that it has $3.3 billion out of its $40 billion in reserves.
Read more related articles:
- 16 Best Universities for Metaverse and Web3: Education, Research
- 50 Best NFT Marketplaces for Creators: Ultimate List 2022
- Top 7 NFT Newsletter Services to Subscribe Right Now
In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.