Circle has announced its decision to discontinue support for USD Coin (USDC) on the Tron blockchain.
The company emphasized that this move is part of its commitment to maintain USDC as a trusted, transparent and safe currency.
Circle will immediately stop minting USDC on Tron and plans to phase out support for the blockchain network by February 2025. This decision affects Circle Mint's business customers, but they will still be able to transfer USDC to other blockchains until a specified date.
Retail users and those not directly affiliated with Circle are encouraged to transfer their Tron-based USDC to exchanges that support stablecoins on other blockchain networks.
There is no specific reason behind the company's choice to discontinue Tron support. However, Circle said it is continually evaluating the suitability of all blockchains within its risk management framework. The repeal is described as the result of a comprehensive, company-wide approach involving various departments, including compliance and business organizations.
Stablecoins like USDC are cryptocurrencies that are pegged to a fiat currency such as the US dollar and backed by asset reserves. USDC is the world's second largest stablecoin, with a market capitalization of over $28 billion, according to CoinMarketCap data. This number puts it among the world's top 10 cryptocurrencies, despite a nearly 36% decline in market capitalization over the past year.
According to the data, the distribution of USDC across various blockchains is heavily skewed towards Ethereum, with over $22 billion of the total circulating supply hosted on Ethereum. Solana is next with $1.4 billion, followed by Polygon with $530 million. By comparison, Tron's share of USDC's overall market presence is relatively modest at his $313 million.
The decision comes after a turbulent first quarter of 2023 for USDC, marked by runs and a banking crisis that affected several large financial institutions, including Silicon Valley Bank. More than a year later, Circle is focused on expansion in Europe and is seeking key licenses to increase its presence in the market.
Circle’s move to list in the US was revealed last month, highlighting the significant market position of its USDC stablecoin. The announcement comes amid Circle's previous denials about providing services to Tron founder Justin Sun, following allegations by the Campaign for Accountability of potential infringements through integration with the Tron network.
Accountability campaigns have linked the TRON network to a variety of international law enforcement activities involving organized crime and sanctioned entities.
Additionally, the Securities and Exchange Commission filed suit against Sun and the TRON Foundation in March 2023, alleging that they engaged in issuance of unregistered securities and manipulative trade practices, an allegation that Sun disputed.
