Circle, the company that created USDC and other Circle related stablecoins like EURC, has announced that it would discontinue providing USDC on Tron Blockchain (TRX).
The motive behind this plan is still unclear, but according to its Twitter (X) and publication on their blog post, Circle is discontinuing USDC on Tron Blockchain to increase transparency and also complying with regulators, giving hints of potential problems related to Tron Blockchain and Circle itself.
Circle Plans on Discontinuing USDC on Tron Blockchain
The announcement was officially published today where the company stated it would stop providing services related to USDC and all their stablecoins on the Tron Blockchain, effective immediately.
Circle also continues to state that most transactions and redemptions of USDC using the Circle Mint service will still continue until February 2025.
This means that users who still hold USDC on the Tron Blockchain through DApps and other centralised and decentralised services will still be able to redeem and withdraw their USDC on the Tron Blockchain or move it to other blockchains.
Circle Mint is a service that lets companies and projects mint USDC on all chains easily so most companies and projects rely on it to supply USDC for their product users.
So, even though Circle said that it would stop it effective immediately, the discontinuation of USDC on Tron Blockchain will not happen all at once, but it will be in stages so no user will experience sudden losses of their money that is currently stored as USDC on Tron Blockchain.
Most investors thought that the discontinuation is a sudden move which hints that Circle is currently dealing with regulators, indicating potential regulatory problems for the company.
Some also speculates that this move indicates that Tron is currently having problems with regulators or among its own team.
Increasing Transparency Near IPO
While those speculations are not fully wrong, Tron and Circle is currently dealing with regulators but with different problems that are being discussed.
Circle is currently preparing for an IPO or Initial Public Offering of their company, where they plan to raise capital with a valuation of $97.5 Billion based on their market capitalisation in the crypto space right now.
The IPO was filed last month which creates a positive sentiment towards most investors, as speculation rises of higher crypto adoption in the US with Circle’s IPO.
To do an IPO in the US, Circle has to comply with every aspect of regulations, including being transparent and avoiding any unnecessary risk with its partner.
Considering how tight regulations are around crypto related companies in the US, Circle is currently jumping through hoops to make the IPO possible.
One of the hoops that they need to jump through is cutting ties with partners that pose regulatory risks and changing some things regarding how they operate.
This includes cutting ties with Tron Blockchain who has been accused of a couple of things which makes them non compliant in the regulator’s eye, especially in the US.
Just last year, Justin Sun, and his companies including Tron, has received a lawsuit from the SEC or the Securities and Exchange Commision, one of the regulatory bodies that oversees financial activities in the US.
The lawsuit might be one of the motives behind the discontinuation of USDC and other stablecoins on Tron Blockchain, so that Circle can be more compliant, thus creating a better runway for an IPO.
Although this news has stirred up some speculations, it can be confirmed that USDC is currently still compliant and operating well without any hints of potentially defaulting.
Circle will probably make another statement to ease the public regarding this situation, but as of right now, everything is still operating as usual aside from all the stablecoins leaving the Tron Blockchain.
