USDC Stablecoin Has Dropped Market Cap Since September

Stablecoin USDC. (Foto; Dok. CoinIran)

JAKARTA – The USDC Circle stablecoin has reportedly lost its market cap. Unmitigated USDC's market capitalization decreased by almost 20 percent from 53.3 billion dollars to 43.9 billion US dollars.

In one day (September 26), nearly $5 billion in USDC was withdrawn, representing a loss of nearly 9.2 percent of its total capitalization. USDC's stablecoin market capitalization peaked last July. At that time the USDC market cap reached 55.8 billion US dollars

Tornado Cash Impact

Last August, Tornado Cash, a decentralized financial platform (DeFi) that prioritizes user data privacy, was suspected of facilitating money laundering and other illegal activities. This resulted in the arrest of Tornado Cash developer Alexey Pertsev in the Netherlands.

Not long after, about 75,000 USDC was frozen by the authorities because it was linked to a Tornado Cash address. This condition triggered a loss of community confidence, resulting in strong reactions and mass withdrawals by investors.

Even crypto lending platform MakerDAO, which has most of its reserves backed by stablecoinUSDC, considers the action taken by Circle to be a violation of privacy rights.

The project started talking about canceling its dependence on USDC, arguing that at any time, it could suffer the same fate as wallets associated with Tornado Cash, given the extreme level of centralization that USDC has.

However, while everything seems to be pointing towards MakerDAO turning against USDC, yesterday, they announced approval of a new proposal to deposit USDC on crypto exchange platform Coinbase which is worth up to 1.6 billion US dollars as a reserve fund in their USDC on Coinbase Prime to generate 1, 5 percent in the form of rewards.

Even though USDC's market cap has decreased in recent months, it seems that there are still a number of major crypto projects working to help the recovery of USDC Circle continue to operate.

In addition, USDC also has to face stiff competition from its challenger, the stablecoin Binance USD (BUSD). As you know, Binance has removed the USDC trading pair from its platform in favor of BUSD. Apart from Binance, Indi's crypto exchange platform, WazirX is also doing the same.

This condition triggered the decline of USDC's market capitalization by 6 percent. Meanwhile, BUSD's market capitalization began to creep up and threaten USDC's position as the second largest stablecoin after USDT Tether.