Circle Stays Bullish Despite SVB Collapse And Liquidity Challenges
USDC issuer Circle remains optimistic about its future despite recent liquidity challenges triggered by the collapse of Silicon Valley Bank (SVB). The company swiftly transferred its SVB funds to Bank of New York Mellon, mitigating potential risks and redemptions caused by fear and uncertainty surrounding Circle’s reserves.
USDC issuer Circle remains bullish about its future prospects despite recent liquidity challenges triggered by the collapse of Silicon Valley Bankhttps://t.co/UJZqlmMgfw
— crypto.news (@itscrypto_news) June 8, 2023
Circle’s Compliance Advantage
Jeremy Allaire, the CEO of Circle, is confident that once a clear regulatory framework is established in the US, the company will gain a competitive edge. Currently, US lawmakers are working on a draft proposal to categorize cryptocurrencies as securities or commodities. The absence of comprehensive regulations has created an unfavorable environment for the crypto market ecosystem.
Recent legal actions against major players like Binance and Coinbase have raised concerns about potential bias exhibited by US regulators, particularly the Securities and Exchange Commission (SEC), against non-US crypto businesses. Speculation has emerged that USDC, as a stablecoin, may receive preferential treatment from the US government compared to its primary counterpart, Tether (USDT).
Allaire emphasizes that Circle’s unwavering compliance with financial regulations will ultimately give USDC a competitive advantage. He believes that with proposed bills like the one in the US House of Representatives, Circle will end up doing more business with banks than it currently does, potentially making USDC a direct competitor to traditional US banks.
Growing Regulatory Footprint
Circle has demonstrated its commitment to regulatory compliance since its establishment in 2013. The company has obtained in-principle approval as a major payment institution license holder in Singapore and is regulated as a licensed money transmitter in 48 jurisdictions across the US. The Monetary Authority of Singapore (MAS) recently granted Circle’s Singapore division a Major Payment Institution (MPI) license, further solidifying its regulatory standing.
In addition to its existing regulatory positions, Circle has applied for a French license to be recognized as an electronic money institution and a digital asset service provider, pending approval.
Circle’s proactive approach to safeguarding its position in the market during the ongoing banking crisis showcases its strategic manoeuvres. By positioning USDC as a stablecoin that adheres to financial regulations, Circle aims to secure a significant market share. Despite recent challenges, Circle remains determined to navigate the evolving regulatory landscape and capitalize on future opportunities.
