The capitalization of the second largest stablecoin USDC decreased by $1.6 billion after the Circle consortium decided to block the addresses of the popular mixing service Tornado Cash.
At the time of publication, the USDC capitalization is $53.47 billion, although two weeks ago the figure reached $55.1 billion. Analysts attribute the decrease in capitalization to the decision of the consortium management to block the wallets of the Tornado Cash mixer. There are more than 75,000 USDC left on the mixing service addresses.
“After another increase in pressure from US regulators on cryptocurrency companies, I would not be surprised if institutional investors and large industry participants decide to move their funds outside the US. Over the past month, more than $1 billion has been transferred from USDC to USDT,” wrote VanEck strategist Gabor Gurbacs.
As Ego Huang, CEO of Deepcoin, noted, investors are not too interested in regulatory nit-picking from the US or other countries. That is why the capitalization of the decentralized stablecoin UST grew at such a pace. However, errors in architecture and project management led to the collapse of the entire Terra ecosystem. According to Huang, investors are moving capital from USDC to USDT because they do not welcome the possibility of blocking funds in their accounts.
Earlier, the founder of one of the oldest decentralized finance protocols Maker, Rune Christensen, spoke about the need to untie the DAI stablecoin from the US dollar. At the moment, half of the stablecoin collateral is stored in USDC.
Source: Bits
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