The USDC issuer said retail users can no longer mint stablecoins from Circle and will need to buy tokens from exchanges or brokerage firms.
USDC is the second largest stablecoin by market capitalization. Source: Shutterstock
USD Coin token is a stablecoin pegged to the U.S. dollar, meaning Circle maintains $1 in cash or cash equivalents in reserve to back the $25 billion worth of tokens in circulation. USDC is the second most popular dollar-backed stablecoin after Tether (USDT), which had a market cap of $85 billion on Tuesday, according to Coingecko data.
When asked about a screenshot of an email circulating in a public Telegram chat, a Circle spokesperson told reporters: "Circle is phasing out support for legacy consumer accounts and has notified individual consumers of this decision. The account closure does not apply to business or institutional Circle Mint accounts."
This means that Circle will no longer create new accounts for individual retail customers, and customers who want to mint USDC will need to do so through an exchange or brokerage firm. Circle Mint accounts will still be available, but only for institutional traders, exchanges and wallet companies, and other fintech companies.
While Tuesday's announcement sparked some interest, a Circle spokesperson added that the company hasn't offered consumer accounts in years.
The stablecoin issuer launched the Circle Mint program (then called Circle Account) in February 2022. At the time, Circle Vice President of Product Rachel Mayer said the goal was to make these accounts "the premier destination for payments and financial activity."
Circle has seen USDC’s market cap slump since launching the program in 2022. At the time, USDC tokens in circulation were worth about $53 billion. A few months later, in June 2022, the Boston-based company’s stablecoin hit an all-time high of $56 billion in market cap. For a while, it seemed like USDC was poised to catch up to, and perhaps even surpass, its rival, USDT.
But confidence in USDC took a severe hit in March 2023 when Circle revealed that it had more than $3 billion worth of reserves in accounts at Silicon Valley Bank, which had just been shut down by California banking regulators following a bank run.
It is one of many cryptocurrency companies that have disclosed SVB exposure. The list also includes now-defunct cryptocurrency lender BlockFi, Avalanche, Proof and Yuga Labs.
Investor panic caused USDC to temporarily lose its peg to the U.S. dollar, with the price falling to $0.87, a record low. At the same time, investors redeemed more USDC than usual during the bear market. This means they have been closing their cryptocurrency positions and converting the funds back into fiat currencies, such as the U.S. dollar.
This has all led to a steady decline in USDC’s market cap, despite news of Coinbase acquiring a stake in Circle or efforts to expand USDC’s user base in Latin America.
Editor’s note: This article has been updated to clarify that Circle Mint is a rebrand of Circle Account and that the USDC token, not Circle, lost its peg in March 2023. #散户投资 #Circle
