Anchorage Digital Faces Backlash Over Stablecoin Support Discontinuation
Anchorage Digital, a prominent cryptocurrency firm, is facing backlash from the stablecoin sector following its recent decision to discontinue support for three stablecoins—USDC, Agora USD (AUSD), and Usual USD (USD0). The company cited adherence to regulatory standards and internal risk evaluations as the reasoning behind this move. Notably, Nick van Eck, the co-founder and CEO of stablecoin provider Agora, publicly criticized Anchorage’s announcement via a post on X, asserting that the decision was driven by misleading information about the stability of these coins and their issuing institutions.
Historical Significance and Safety Matrix
Anchorage Digital has a historical significance in crypto as it was among the first to secure a US banking charter. In a statement released earlier this week, the firm introduced a so-called “stablecoin safety matrix” aimed at assessing stablecoins against emerging regulatory requirements. According to Rachel Anderika, Anchorage’s head of global operations, the evaluation process determined that USDC, AUSD, and USD0 did not align with the company’s internal standards necessary for sustained market viability. She explained that the assessment revealed higher concentration risks linked to the structures of their issuers, emphasizing that such risks warrant scrutiny from institutions involved in these assets.
Regulatory Developments and Market Impact
In light of anticipated regulatory developments, most notably the GENIUS Act, Anchorage’s safety matrix also aims to prepare for evolving standards within the United States. The provisions of the GENIUS Act, which has progressed through Congress, are designed to define and regulate stablecoins more rigorously, and Anchorage is positioning itself in advance of these guidelines. The comprehensive analysis carried out by the firm includes factors like liquidity, historical depegging incidents, and the concentration risk of the stablecoins in question.
Interestingly, combined, AUSD and USD0 represent only a minor segment of the stablecoin market valued at approximately $700 million, whereas USDC commands an impressive $61 billion market capitalization. The issuer of USDC, Circle, recently made headlines with its robust debut on Wall Street amid growing institutional interest in stablecoins.
Industry Reactions and Future Outlook
While both Circle and Agora are based in the United States, Usual operates from Paris. Despite attempts to gather further insights, Circle had not responded to inquiries by the time this article was published.
Van Eck expressed that if Anchorage had decided to remove support for USDC and AUSD purely to focus on stablecoins in which it has a financial interest, it could have been perceived as a standard business strategy. However, he condemned Anchorage’s justification of security concerns as a basis for delisting these stablecoins, suggesting that it was misleading and undermines the credibility of the sector.
The proposed GENIUS Act is gaining momentum, having already passed the Senate, and is poised for presidential approval. In tandem with developments in the U.S., international stablecoin issuers are also re-evaluating their regulatory compliance. However, some firms, like Tether, have expressed reluctance to engage with stringent frameworks such as the European Union’s Markets in Crypto-Assets (MiCA), indicating a potential divide in stability and regulatory alignment among global stablecoin issuers.
