Jeremy Aller: US is to blame for the two-fold drop in USDC capitalization

Article Reading Time:
1 min.

CEO of Circlebelieves that the banking crisis and problems with regulation of the crypto industry in the United States are the main factors that led to a decrease in the market capitalization of USDC.

Circle's USDC stablecoinIt now ranks second in market capitalization after the stablecoin Tether (USDT). In the summer of 2022, the total value of USDC reached $56 billion, but as of April 26, 2023, it decreased by approximately half, to $30.7 billion. 

"We're seeing a huge amount of concern all over the place.world about the US banking system. We see concerns about the regulatory environment in the US,” said Circle CEO Jeremy Allaire.

Circle's problems began after the collapse of SiliconValley Bank, where the company stored assets worth approximately $3.3 billion. Under ideal conditions, the stablecoin should be pegged to the dollar in a ratio of 1 to 1. However, after the collapse of the bank, USDC became cheaper for more than a day, falling at some point to $0.85.  

By mid-March the situationstabilized when Circle got its money back and moved assets to other banks. USDC has regained its lost peg to the dollar. However, investor confidence was still undermined. At the end of March, Circle announced that it would be reducing the number of USDC stablecoins in circulation.