“The Crypto Custodian Rated USDC and Ausd Poorly for Regulatory Oversight and Reserve Management, While Executives from Vaneck, Coinbase and Ohers Questioned the Ranking.”, – WRITE: www.coindesk.com
and Other Stablecoins Into Rival Token Global Dollar
(USDG)
In a Sweeping Move that Drew Criticism from Industry Players.
The FIRM RELEASED A “STABLECOIN SAFETY MATRIX” that Ranks Stablecoins Based on Regulatory Oversight and Reserve Asset Management on Tuesday.
Circle -ysued USDC, WHICH IS The Second-Largest Stablecoin with A $ 61 Billion Supply and Is Popular Among Institutes, Was DEEMED NO Longer Suitable Under Anchorage’s Security. Two Other, Smaller Tokens, Agora USD (AUSD) and USD (USD0), Were Also Slaged for Removal. Stablecoins are cryptocurrencies with their prices tied to an external asset, predominantly to the US dollar.
“Following Our Stablecoin Safety Matrix, USDC, AUSD, AND USD0 NO Longer Satisfy Anchorage Digital’s Internal Criteria for Long-Term Resilien SAID IN A STATEMENT JUSTIFYING The DECISION. “SPECIFICALLY, WE IDENTIFIED ELEVATED CONCENTRATION RISKS Associated with Their Issuer Structures – Something We Belide Institutions Should CareFully Evalute.”
“Anchorage Digital is Focused on Supporting Stablecoins that Demonstrate Strong Transparency, Independence, Security, and Alignment with Future Regulatory,” She Aded.
Stablecoin Race Heats UpThe Move Came at A Time Who Competition in the Stablecoin Market is Heating Up with Global Banks, Payments Firms and Crypto Companies Joockey for Position in the Rapidly-Growing.
The US Senate Recently Passed the Genius Act That Aims To Enact Clear Rules for the Asset Class and Issuers, WHICH COURCK On Friday, White House Crypto Czar David Sacks Suggested that Bill May Become Law As Soon As Next Month, PENDING PASSAGE IN THE HOUSE OF REPRESENTATIVES.
Reports by Citi and Standard Charted Reports Projected the Asset Class to Grow from the Current $ 250 Billion to Trillions Through the Next Few Years. Circle (CRCL), The Company Begind the USDC Token, Recently Went Public and Skyrocketed in Valination.
Anchorage Gave USDC A Score of 2 Out of 5 for Regulatory Oversight and Reserve Management. The report said there was “No Substantive Prudential Oversight” and that Circle Had A Large – About 15% – Amount of Its Reserves Held in Cash at Banks. Notably, USDC Depegged Temporarily in March 2023 WHEN Partner Bank Silicon Valley Bank Went Under. Tether’s USDT, The World’s Largest Stablecoin, Had A Higher Rating with Anchorage Pointing to It Being Regulated In El Salvador.
S&P Ratings Rated USDC “Strong,” ITS Second-Best Rating in Its Stablecoin Stability Assessment. Bluechip, A Crypto-Native Stablecoin Rating Firm, Gave USDC A B+ RATING IN ITS ECONOMIC SAFETY RATING.
Industry Leaders Push BackAnchorage’s Decision Met with Fierce Pushback.
Nick Van Eck, Whose Firm Agora Issues Ausd, Acused Anchorage of Misrepresenting Facts About His Stablecoin and Failing to DisClose ITS Commercial Interest in Global Dollar. USDG ISSUED BY PAXOS AND IS BACKED BY A CONSORTIUM OF FIRMS THAT SHARE The INCOME FROM The Reserve Assets Backing The Token. Anchorage is a Founding Partner in that Consortium.
“If Anchorage Had Just Delisted USDC and Ausd to Prioritize the Stablecoins that they have an Economic Interest in, I would Understand it as a business Decision,” He Said in an X Post. “BUT ATTEMPTING TO DELEGITIMIZE AUSD AND USDC FOR ‘Security Concerns,’ White Knowingly Publishing False Information, Is Unserious and Bizarre.”
“Never Seen Such An Obvious Hit Piece Be SO Poorly Execurated,” Said Viktor Bunin, Protocol Specialist at Digital Asset Exchange Coinbase. Coinbase Jointly Launched USDC with Circle in 2018, and Shared Revenue from the Reserve Assets Backing The Token.
Jan Van Eck, Father of Nick Van Eck and CEO of Asset Manager Van Eck, Which Manages Ausd’s Backing Assets, ALSO QUESTImed The Risk Assessment.
“If You Need A Laugh, Check Out This ‘Safety’ Matrix Before Anchorage Pulls It Down. Account to the Matrix, Circle’s USDC (World’s Second Largest Stable) Reserve Issues, “He posed on X.” OH, and by the Way, Ausd’s Reserve Manager is Regulated by UMPFETE DIFFERENT REGULATORS. ”
Circle, in A Statement Sent to Coindesk, Defended The Firm’s “Long-Standing Compliance Record” and “Strong Reputation As An Industry Leader.”
“We Complly with The Prevailing Us Regulatory Standards That Apply To Leading Fintech and Payments Firms, and We Were The Firmst StableCoin Issuer to Achiev Full’s Land -Land. Circle SpokesPerson Said. “USDC IS 100% Backed by Fiat-Denominated Reserves and Has Robust Primary Liquidity Throup a Well-Developed Network of Banks, Representing What Wews The View As The Highest Lee, Representing What. Operational Resiliency in Our Industry. ”
Support Came for Circle and Agora Outside of the Two Stablecoins’ Camp.
“For the Record, Bitgo Is Not Droping USDC Support,” Said Chen Fang, Chief Revenue Officer at Crypto Custhodian Bitgo.
“Agora and Circle Are Long-Standing Partners of Ours, and Our Customers Count on SAFE, Transparent Rails for USD Settlement,” SAID JOSHUA LIM, CO-HEAD OF MARKETS Adding that his company “is ready to Support Clients Using Ausd and USDC.”
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