USDC’s struggles is due to US crackdown, says Circle’s Jeremy Allaire

Key takeaways

• Circle’s CEO Jeremy Allaire has blamed the banking crisis in the United States for USDC’s recent struggles.

• USDC has lost roughly $13 billion of its value in recent months.

• Allaire says investors are de-risking outside of the US, and this is affecting USDC.

Allaire blames US crackdown for recent struggles

Jeremy Allaire, the CEO of Circle, USDC’s issuer, has blamed the government for the stablecoin’s recent struggles. He mentioned this during an interview with Bloomberg on Wednesday, April 26th.

According to the Circle CEO, investors are looking to de-risk out of the United States due to the recent banking crisis that has rocked the country. 

Earlier this year, Silvergate Bank shut down its cryptocurrency operations, affecting numerous crypto companies, including Circle. 

The stablecoin issuer was forced to move its USDC reserve deposits out of Silvergate Bank as the financial institution continued to struggle.

In the interview, Allaire told Bloomberg TV that;

“We are seeing a huge amount of concern globally about the US banking system. We are seeing concern about the regulatory environment in the US.”

Circle’s USDC temporarily lost its $1 peg during the banking crisis but regained its value as the market stabilised. 

Allaire has urged lawmakers in the United States to step up and provide clear regulation for the crypto space. He stated that;

“The European Union, Hong Kong, Singapore and the Middle East are making progress on crypto rules, while the US is behind right now.”

USDC Falls Behind Tether’s USDT

Circle’s recent struggles have seen its stablecoin fall behind its nearest competitor, Tether’s USDT. Following the banking crisis, USDC’s market cap dipped by more than $13 billion, and it currently has a market cap of around $30 billion.

This has allowed Tether’s USDT to cement its position as the leading stablecoin in the market. USDT has a market cap of $81 billion, nearly triple that of USDC, its nearest competitor. 

Circle also had roughly $3.3 billion stuck in the now-collapsed Silicon Valley Bank. The company has already indicated that it intends to cover any financial shortfalls resulting from the recent banking crisis.