Circle, the issuer of the USDC stablecoin, has announced its decision to discontinue support for USDC on the TRON blockchain.
The company revealed on February 20 that it is initiating a phased transition away from TRON, giving users a one-year window to transfer their USDC holdings on TRON to other supported blockchains. The move includes Ethereum, Solana, Algorand, and 11 other blockchains where USDC is issued.
This sudden decision by Circle to withdraw support for TRON can be interpreted as a strategic move, potentially impacting Tether (USDT), the largest stablecoin by market cap and volume. Tether has issued more than half of its stablecoins on the TRON blockchain, totaling $52 billion in crypto, according to its transparency page.
Circle has already removed TRON as a supported ecosystem from its website, signaling a definitive shift away from the blockchain created by Justin Sun. While the announcement did not provide detailed reasons for the decision, Circle stated that;
Our decision to discontinue support for USDC on TRON is the result of an enterprise-wide approach that involved the business organization, compliance and other functions across our company.
The blog post hinted that TRON may lack the transparency and essential characteristics required by Circle for blockchain utilization. At the very least, it suggests that recent actions by Justin Sun, particularly involving his exchange HTX and algorithmic stablecoins like USDD, might have influenced the decision.
Notably, Circle and other stablecoin operators criticized Tether in a congressional hearing last week. The withdrawal of support for TRON by Circle underscores the significance of a major stablecoin operator opting against using Sun’s cryptocurrency. In response to the decision, Sun issued a vague statement on X (formerly Twitter), expressing support for “each developer’s development decisions.” The implications of this move on TRON’s future and Sun’s ventures remain uncertain.
We respect and support each developer's development decisions and hope to encourage them to develop on TRON. Ultimately, TRON's vision is to become the largest and most prosperous decentralized financial protocol in the world.
— H.E. Justin Sun 孙宇晨 (@justinsuntron) February 21, 2024