Anchorage Digital, a Crypto -Depot and Federally Chartered Bank, said it will start phasing out and direct institutional clients to convert USDC
and other stableecoins for rival token global dollar (USDG) In a sweeping move that drew criticism from industry players.
The company released a “stableecoin safety matrix” that ranks stableecoins based on regulatory supervision and reserve asset management on Tuesday.
Circle-issued USDC, which is the second largest stableecoin with a delivery of $ 61 billion and is popular with institutions, was no longer considered suitable under Anchorage’s security frame. Two other, smaller tokens, Agora USD (AUSD) and usual usd (USD0)were also scheduled for removal. Stableecoins 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 resilience,” Rachel Anderika, head of global operations at Anchorage, said in a statement that justified the decision. “Specifically, we identified increased concentration risks associated with their issuer structures – something we believe institutions should be carefully evaluated.”
“Anchorage Digital is focused on supporting stableecoins that demonstrate strong transparency, independence, security and adaptation to future regulatory expectations,” she added.
StableCOin Race is heated
The move came at a time when competition in the stablecoin market is warming up with global banks, paying companies and cryptic companies that jockeys for position in the fast-growing sector.
The US Senate recently adopted the ingenious action aimed at adopting clear rules for the asset class and issuers who could open the gates to wider adoption. On Friday, the White House Crypto Czar David Sacks suggested that the bill could be allowed as soon as next month pending passage in the House of Representatives.
Reports from Citi and Standard Chartered Reports expected the asset class to grow from the current $ 250 billion to trillion over the next few years. Circle (CRCL)The company behind the USDC tokenet, recently went public and skyrocketed in valuation.
Anchorage gave USDC a score of 2 out of 5 for regulatory supervision and reserve management. The report said there was “no substantial gently oversight” and that the circle had a large one – approx. 15% – amounts on its reserves that were kept in cash in the banks. In particular, the USDC temporarily DEPEGED in March 2023, when Partner Bank Silicon Valley Bank went under. Tether’s USDT, the world’s largest stableecoin, had a higher rating with Anchorage, pointing to it being regulated in El Salvador.
The S&P rating assessed USDC “Strong”, its second best assessment in its stablecoin stability assessment. BlueChip, a Crypto-Inborn StableCoin rating company, gave USDC a B+ rating in its financial security assessment.
Industrial leaders push back
Anchorage’s decision met with hard pushback.
Nick van Eck, whose company Agora emits AUSD, accused Anchorage of incorrect representation of facts about his stablecoin and failed to reveal his commercial interest in the global dollar. USDG is issued by Paxos and is supported by a consortium of companies sharing the income of the reserve assets that support the token. Anchorage is a basic partner in this consortium.
“If Anchorage had just delisted USDC and AUSD to prioritize the stablecoins in which they have a financial interest, I would understand it as a business decision,” he said in an X post. “But trying to delegiti AUSD and USDC to ‘security concerns’, while deliberately publishing false information, is irreplacious and bisarr.”
“Never seen such an obvious hit be so badly done,” 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 that support the token.
Jan van Eck, father of Nick van Eck and CEO of Asset Manager Van Eck, who manages AUSD’s support assets, also questioned the risk assessment.
“If you need a laugh, check out this ‘security’ matrix before Anchorage pulls it down. According to Matrix, Circle’s USDC (the world’s second largest stableecoin) and AUSD (supported 100% of treasuries) Have reserve problems, “he posted on X.” Oh, and by the way, AUSDS Reserve Manager is regulated by the UMPTEEN different regulators. “
Circle, in a statement sent to Coindesk, defended the company’s “long-term compliance record” and “strong reputation as industry leader.”
“We comply with the prevailing US regulatory standards that apply to leading fintech and pay companies, and we were the first stableecoin issuer to achieve full compliance with the European Union Landmark Crypto Law,” a circle spokesman said. “USDC is 100% supported by Fiat-Denominated Reserves and has robust primary liquidity through a well-developed network of banks representing what we consider the highest levels of transparency, security and operational elasticity in our industry.”
Support came to Circle and Agora outside the two StableCoins’ camp.
“For the record, Bitgo doesn’t let go of USDC support,” said Chen Fang, Chief Revenue Officer at Crypto Custodian Bitgo.
“Agora and Circle are long-time partners of ours, and our customers are expecting safe, transparent rails for USD settlement,” said Joshua Lim, co-manager for markets at Crypto Prime Broker Falconx, adding that his company “is ready to support clients using AUSD and USDC.”
