US crackdown to blame for fall in value of USDC, Circle CEO Jeremy Allaire says

Quick Take

  • USDC has been losing ground to rival USDT since the banking crisis in the United States rocked issuer Circle.
  • Allaire sees investors’ desire to “de-risk out of the U.S.” as a critical factor in the fall in the market value of the stablecoin.

Jeremy Allaire, CEO of Circle Internet Financial, blames the shrunken value of the company’s stablecoin, USD Coin, on regulatory challenges in the United States and concerns about its banking system.

Allaire said investors’ desire to “de-risk out of the U.S.” is contributing to a fall in the market value of USDC during an interview on Bloomberg Television on Wednesday.

USDC remains one of the crypto sector’s most relied-upon stablecoins, but close ties to the U.S. have seen it lose ground in key metrics lately. The Block Research’s data indicates that the total supply of USDC in the market has fallen by roughly $10 billion since the start of the year to its current level of just above $30 billion. Meanwhile, the supply of rival USDT has gained ground to reach a total supply of $82.5 billion.

“We are seeing a huge amount of concern globally about the U.S. banking system,” Allaire, told Bloomberg. “We are seeing concern about the regulatory environment in the U.S.”

Circle got caught up in the U.S. banking crisis earlier this year when it disclosed that it had $3.3 billion in reserves — part of the capital that backs up the value of its stablecoin — stored with Silicon Valley Bank, the ill-fated lender. USDC, which is supposed to be pegged to one U.S. dollar, briefly fell in value to as little as $0.88 before recovering a few days later.


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SVB’s collapse came soon after two crypto-friendly banks in the U.S. — Silvergate Bank and Signature Bank — were shut down by regulators, leaving precious few banking options for startups in the space.

Only a week after the SVB episode, Circle announced that it had applied for a French crypto asset license as part of a plan to put down deeper roots in Europe.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Ryan Weeks is deals editor at the The Block, focused on fundraising, M&A and institutional trends in the crypto space, among other things. He is particularly interested in investigative work — so please send tips! Ryan previously worked at Financial News, Dow Jones as a fintech correspondent in London. Prior to that, he wrote for several different publications, including Sifted, AltFi and Wired. Beyond journalism, Ryan is a keen reader and writer. He enjoys all things active, especially running, rugby, climbing and tennis.


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