Circle Discontinues Stablecoin Creation for Individual Accounts
Circle Internet Financial, the issuer of the USDC stablecoin, has announced that it will no longer allow individual accounts to create stablecoins. The company is phasing out support for legacy consumer accounts and has informed affected users about this change. However, business and institutional accounts under the Circle Mint umbrella will not be affected.
Circle currently caters only to qualified institutional clients and does not offer services directly to retail consumers. For retail users interested in accessing USDC, the company recommends using brokerages, cryptocurrency exchanges, and digital wallet services.
Circle’s Policy Change Sparks Speculation
A report by CoinDesk reveals that Circle plans to cease wire transfers and stablecoin minting capabilities for individual accounts by November 30, 2023. Screenshots of an email from Circle to an account holder have been shared on social media, leading to speculation about Circle’s account management policies.
This move aligns Circle’s policies more closely with its primary competitor, Tether. Tether has long required a minimum threshold of $100,000 for minting and redeeming its USDT stablecoin.
USDC Market Share Declines
USDC is currently the second-largest stablecoin with a supply of $25 billion. However, it has experienced a significant decline in market share this year. USDC’s market capitalization has dropped by 43% year-to-date, while Tether’s USDT has reached a new all-time high with a market capitalization exceeding $84 billion.
Tether Discloses Excess Reserves
In its Q3 2023 attestation, Tether revealed that it has $3.2 billion in excess reserves backing its stablecoins, including USDT. The attestation, verified by accounting firm BDO Italy, showed that Tether has $86.4 billion in assets against $83.2 billion in liabilities as of September 30, 2023. The company also disclosed $5.2 billion in secured loans, with plans to reduce them to zero by the end of 2023.
Hot Take: Circle Restricts Stablecoin Creation for Individual Accounts
Circle Internet Financial has made the decision to discontinue stablecoin creation for individual accounts, aligning its policies more closely with competitor Tether. This move has led to speculation about Circle’s account management practices and may indicate a shift towards catering exclusively to qualified institutional clients. As USDC’s market share declines, Tether continues to dominate the stablecoin market with impressive growth and excess reserves backing its stablecoins. It remains to be seen how these developments will impact the overall landscape of stablecoins and their adoption in the crypto industry.
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