Circle CEO Jeremy Allaire on Wednesday stated that the regulatory burden and regulators' push to stress the crypto market is causing the market value of the stablecoin USD Coin (USDC) to continue to fall. Allaire revealed investors are urging companies to consider exiting the US amid a lack of regulatory clarity in the country.
The market cap of stablecoin USDC fell to $30.6 billion today, continuing its decline since mid-2022. While USDC fell, the market cap of other stablecoins such as Tether (USDT) recovered above $81 billion amid a market surge this year.
During an interview on April 26, Circle CEO Jeremy Allaire said:
"We see a significant amount of concern around the world about the US banking system. At the same time, we also see concern about the regulatory environment in the US."
The USDC stablecoin reserve is backed in the majority by US treasuries and cash deposits. USDC fell against the US dollar amid a banking crisis after US regulators shut down three crypto-friendly banks Silvergate, Silicon Valley Bank and Signature under Operation Choke Point 2.0.
Crypto exchanges, companies and investors are moving away from USDC as it is OFAC compliant. After OFAC, the U.S. Treasury Department agreed to hamper Tornado Cash.
Regulators have increased their scrutiny of stablecoins after the Terra-LUNA crisis and the fall of FTX. As a result, several U.S.-based crypto exchanges and companies will leave the U.S.
As a rescue measure, recently, Circle Internet Financial has applied for regulatory approval in France. With the European Union's MiCA regulation approved, Circle will expand its presence and engagement with regulators across the European market.
