Stablecoin USDC bids adieu to Tron network – Why?

• Tron’s USDC market cap shrunk by 72% in the past year.
• TRX remained unaffected, gaining 2.56% in the last 24 hours.

In a significant development, stablecoin issuer Circle announced the discontinuation of its USDC coin on the Tron [TRX] blockchain.

Effective immediately, the minting of USDC on the network would be stopped, the company said in a blog post.

While the issuer would assist its institutional customers to transfer their USDCs to other blockchains until February 2025, retail and non-Circle customers were asked to move their holdings out of TRON using exchanges and other services.

Circle said the move aligned with its risk-management framework, aimed to keep USDC “trusted, transparent and safe”.

Tron’s native token TRX seemed to have shrugged the development aside, gaining 2.56% in the 24-hour period at press time, as per CoinMarketCap.

The weakening bond

USDC was the second-largest stablecoin as of this writing, with a market valuation to the top of $26 billion, according to AMBCrypto’s analysis of DeFiLlama data.

However, just about $313 million, or 1.17% of this supply, exists on the Justin Sun-owned Tron. In fact, Tron’s USDC market cap has shrunk by 72% in the past year.

Source: DeFiLlama

While a lot of it could be attributed to the March banking crisis last year which led to a wider market rout for USDC, recent data do not inspire much optimism either.

USDC’s supply on Tron fell by 16% over the last week, and more than 6% on a monthly basis. In the same time, the stablecoin’s preference for other chains increased.

Solana [SOL] saw a 31% rise in USDC supply over the last month, making it the most dominant stablecoin on the network.

How much are 1,10,100 TRXs worth today?

Tron’s growing troubles

The Tron blockchain and its founder Justin Sun have faced a lot of scrutiny over the past year.

After being sued by the U.S. regulators, allegations of irregularities in platforms controlled by Sun dominated news headlines last year.

One of the biggest blows to Tron’s ecosystem came when it got labeled as the most favored crypto network for terror financing during the Israel-Hamas war.