Anchorage Phases Out USDC, Sparking Industry Backlash
Anchorage Digital Drops USDC, Facing Industry Pushback
Anchorage Digital, a federally chartered crypto bank, announced it will phase out support for USDC and other stablecoins, directing institutional clients to switch to Global Dollar (USDG). This move has sparked significant criticism from industry players.
The company released a "Stablecoin Safety Matrix" ranking stablecoins based on regulatory oversight and reserve management. USDC, the second-largest stablecoin with a $61 billion market cap, received a low ranking due to perceived concentration risks in its issuer structure and a temporary de-pegging incident in March 2023. Agora USD (AUSD) and Usual USD (USD0) were also slated for removal.
Anchorage's Rationale and the Competitive Stablecoin Landscape
Anchorage cited "elevated concentration risks" and a desire to support stablecoins demonstrating strong transparency, independence, and regulatory alignment as reasons for the decision. This comes amidst a rapidly evolving stablecoin market, with increased competition from banks and fintech companies. The recent passage of the GENIUS Act in the U.S. Senate, potentially facilitating broader stablecoin adoption, further highlights the dynamic nature of this space. Market projections from Citi and Standard Chartered forecast trillion-dollar growth in the stablecoin market within the next few years.
While S&P gave USDC a strong rating and Bluechip assigned it a B+, Anchorage's assessment differed, noting a lack of "substantive prudential oversight" and a significant portion of Circle's reserves held in bank cash.
Industry Leaders Respond
The decision prompted strong pushback. Nick Van Eck of Agora accused Anchorage of misrepresenting AUSD and failing to disclose its vested interest in USDG. Viktor Bunin of Coinbase described Anchorage's action as a poorly executed "hit piece." Jan Van Eck, CEO of Van Eck, further questioned the risk assessment, highlighting AUSD's 100% treasury backing and regulatory oversight.
Circle defended its compliance record and the robustness of USDC's reserves, emphasizing its transparency and operational resiliency. Support for USDC and AUSD came from other key players, with BitGo and FalconX confirming continued support for these stablecoins.
Codeum's Note: The stablecoin market's volatility underscores the importance of robust security and regulatory compliance. Codeum provides comprehensive blockchain security services, including smart contract audits, KYC verification, and custom smart contract development, to help companies navigate this evolving landscape. We partner with launchpads and crypto agencies to help foster a secure and transparent ecosystem.