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Circle announced the removal of native USDC on the Tron Network (TRX) as part of its “risk management framework.” This raised concerns about Tron’s future in the market, which could impact TRX’s price performance.
Notably, the company published the announcement on February 21, mentioning compliance as one of the three reasons for the decision. It happened less than a week after Circle’s Senior Director, Caroline Hill, spoke in Congress about Tether (USDT).
“Our decision to discontinue support for USDC on TRON is the result of an enterprise-wide approach that involved the business organization, compliance, and other functions across our company. This action aligns with our efforts to ensure that USDC remains trusted, transparent, and safe – characteristics that make it the leading regulated digital dollar on the internet.”
– Circle
Therefore, Circle will effective immediately halt USDC minting on Tron. However, it will allow its customers to migrate Tron-based USDC to other supported blockchains until February 2025. On that note, Circle only directly serves businesses and institutional customers. Retail can use the cryptocurrency ecosystem to transfer or exchange tokens currently running on Tron.
Tron (TRX) price analysis after losing USDC
This decision can prove itself to be a tough hit against Justin Sun’s blockchain enterprise, Tron. In particular, Circle sends a strong message to the market about their trust in the Tron Network, a stablecoins’ paradise.
Losing the second-largest stablecoin by market cap and volume could affect the demand for TRX, Tron’s DeFi ecosystem health, or influence the support of other institutions.
Meanwhile, Tron’s native token is trading at $0.139 by press time, in an impressive bull rally year-to-date (YTD). On the other hand, such a performance has made TRX reach an overbought status in its daily Relative Strength Index.
Tron price forecast sets a likely scenario of a price correction, fueled by recent news related to Circle’s decision to abandon Tron. In this context, TRX price may test the $0.10 psychological support as investors start migrating USDC from the network.
Nevertheless, cryptocurrencies are unpredictable assets, and Tron price could find higher support if its ecosystem manages to find relevant demand on other fronts. Investors must be cautious in the following days and expect volatility.
In closing, it is worth mentioning Circle declared an intention to offer native USDC services on new promising blockchains. Curiously, Radix Works recently added Lindsey Lim to its board of directors. Lim is a former senior director at Circle, which has sparked rumors about a future USDC implementation on Radix (XRD).
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.