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Crypto firm Circle to end support for USDC stablecoin on Tron blockchain

Published 21/02/2024, 01:05
Updated 21/02/2024, 08:25
© Reuters. FILE PHOTO: A representations of cryptocurrencies in this illustration taken, January 24, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

By Tom Wilson

LONDON (Reuters) -Major U.S. crypto firm Circle will end support for its USDC token on the Tron blockchain network, a decision the company said on Wednesday "aligned with its efforts to ensure that USDC remained trusted, transparent and safe".

Boston-based Circle said in a blog that, effective immediately, it would no longer mint USDC tokens on Tron, a fast-growing platform widely used for transferring stablecoins whose founder is facing regulatory problems in the United States.

Stablecoins are digital tokens that are designed to keep a constant value and are backed by traditional currencies.

Circle did not give a reason for its decision but said that under its risk management framework it "continually assesses the suitability" of blockchains that support USDC, the second-biggest stablecoin after Tether.

It said institutional clients can transfer USDC held on Tron to other blockchains, or redeem the tokens with it for traditional currency, until February 2025. Retail customers can transfer USDC to other blockchains and redeem USDC at crypto exchanges and brokerages, it added.

Tron's vision is to become the world's "largest and most prosperous decentralized financial protocol," a Tron spokesperson said, adding: "We continue to move forward."

Circle, which in January said it had filed for a U.S. initial public offering, last year terminated accounts held with it by Tron founder Justin Sun and his affiliated companies.

Sun, a prominent crypto entrepreneur, was sued last year by the Securities and Exchange Commission for allegedly artificially inflating trading volumes and selling Tron tokens as an unregistered security. Sun said the SEC charges "lack merit".

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Circle's latest announcement affects USDC on the Tron blockchain, "as opposed to an individual user or related business entities", a spokesperson said.

With some $28 billion in circulation, USDC is the eighth-biggest crypto token, according to data firm CoinGecko. USDC worth $335 million are hosted on Tron, Circle's website says.

In November, Reuters reported, citing interviews with financial crime experts and blockchain investigation specialists, that Tron had overtaken Bitcoin as a platform for crypto transfers associated with groups designated as terror organizations by Israel, the United States and other countries.

In response to that article, a Tron spokesperson said it did not have control over those using its technology, and that it was not linked to the groups identified by Israel.

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