According to Bloomberg, Circle, the operator of the $28 billion USDC stablecoin, has decided to stop issuing the token on the Tron blockchain. The decision was made based on a risk management framework that continually assesses the suitability of all blockchains for the stablecoin. TRX, a token linked to the Tron blockchain, is at the center of US fraud investigations. In response to a request for comment about Circle's move, Tron founder Justin Sun said they are currently trying to understand the situation and it seems to be a unilateral commercial decision by Circle.
Stablecoins are typically pegged 1-1 to fiat currencies and backed by reserves of cash and bonds. They make up about $140 billion of the $2.1 trillion digital-asset market, according to data from CoinGecko. The blockchain-based tokens facilitate crypto trading and lending, and some commentators argue they may have a wider use in payments. The market value of stablecoins on the Tron network stands at $51.5 billion, almost all of it accounted for by Tether (USDT).
Last month, Circle announced it had reduced its exposure to commercial paper, a type of short-term debt, by more than half. Once worth as much as $56 billion, USDC's circulation has been in a steady decline since it revealed it had $3.3 billion of exposure to the collapsed Silicon Valley Bank in March last year. The token temporarily veered from its peg during that period of banking stress in the US.
