Circle CEO attributes USDC’s decline in market capitalization to regulator actions

Regulatory actions against crypto firms have been the main factor behind the decline in USDС‘s market capitalization. In an interview with Bloomberg, Circle CEO Jeremy Allaire said.

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Over the last six months, the stablecoin’s total market value fell by 30% — from $43.7 billion to $30.7 billion, according to CoinGecko. The downward trend began in March. At its peak, the capitalization reached $56 billion.

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Besides regulatory tightening, the banking crisis also played a role — Circle’s share in the SVB collapse accounted for about 8% of the total cash reserves backing the stablecoin’s value.

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On March 11, amid the collapse of the institution, USDC lost its peg to the U.S. dollar. Later, Circle said it had resolved the issues with the asset’s banking support.

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Allaire noted that there is currently “enormous concern about the U.S. banking system” and “the regulatory environment in the country.”

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The executive said that the European Parliament’s MiCA bill,Hong Kong’s creation of a business-friendly environment and similar initiatives in the Middle East could lead the United States to lose its leading position in the sector.

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“A critical moment … for Congress to act”, Allaire said.

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In 2023 the SEC pointed to violations in the operations of Bittrex, Coinbase, Kraken, Gemini and Genesis. CFTC filed against Binance and its CEO Changpeng Zhao. The regulator accused the crypto exchange of “willful evasion of U.S. law” and non-compliance with the rules.

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Previously, Coinbase CEO Brian Armstrong said the company may exit the U.S. market. Before that, the top executive had repeatedly criticised the SEC’s policy toward digital assets.

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In March, Circle applied for licenses as a digital-asset service provider and as an electronic money institution in France.

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The company plans to bring its flagship product to the local market — the euro-denominated stablecoin EUROC — and to initiate its recognition under MiCA.