Since March, the USDC market cap dropped by almost 30%.
The crackdown on cryptocurrencies by US regulators is the main reason behind the decreasing market capitalization of USD Coin (USDC), according to Circle CEO Jeremy Allaire.
On April 25th, Jeremy Allaire talked with Bloomberg TV and shared his thoughts about the current US regulatory landscape, which has been shaken by the crypto exchange FTX collapse, a banking crisis, and the temporary de-pegging of USDC.
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In an interview, the Circle CEO highlighted the worldwide anxiety surrounding the US banking system and its regulatory environment.
We are seeing a huge amount of concern globally about the US banking system. We are seeing concern about the regulatory environment in the US.
Circle CEO echoed crypto exchange Coinbase ideas that ambiguous regulations could compel crypto firms to seek opportunities abroad. With Europe passing the Markets in Crypto-Assets Act (MiCA) and Hong Kong pushing for adoption, Allaire predicts the US may fall behind.
It’s a critical moment here in the U.S., and, as I like to say, it’s really a moment for Congress to step up.
It is worth noting that in March, USDC experienced a de-pegging highly impacted by the US banking crisis. Circle had $3.3 billion in USDC reserves trapped at Silicon Valley Bank, one of three crypto-friendly banks shut down by regulators.
Although Circle reassured its customers of investor backing to bridge the gap, the market reacted swiftly, causing USDC to depeg from the US dollar.
Before the US banking crisis, USDC boasted a market cap of $56 billion. However, the recent market turmoils have slashed the stablecoin's market cap nearly in half, with the current figure at $30.7 billion.
At the end of March, Allaire took to Twitter to comment on the US banking crisis, claiming that the global banking crisis could push the crypto sector into an unregulated legal gray area.
