Anchorage Digital has announced the discontinuation of support for USDC, Agora USD, and USD0 stablecoins due to issuer-related risks. This decision has sparked discussions within the industry.
Reasons for Discontinuation
Anchorage Digital, a recognized crypto bank, has decided to phase out USDC, Agora USD, and USD0, citing concerns over issuer structures. According to Rachel Anderika, Head of Global Operations at Anchorage Digital: "Following our Stablecoin Safety Matrix, USDC, AUSD, and USD0 no longer satisfy Anchorage Digital’s internal criteria for long-term resilience. Specifically, we identified elevated concentration risks associated with their issuer structures—something we believe institutions should carefully evaluate."
Market Reactions
The decision by Anchorage has faced criticism from industry leaders like Nick van Eck of Agora, who claims that there may be biased motives, suggesting potential competitive advantages for issuer Paxos as a result of this action. Concerns are also raised by other market participants, emphasizing the importance of scrutinizing Anchorage's motives amid growing regulatory pressures and compliance requirements.
Industry Impact
The removal of these stablecoins may disrupt existing liquidity pools and impact how institutions manage digital assets. The crypto community is keenly observing how this will affect liquidity following Anchorage's actions, although no significant reductions in Total Value Locked have been reported so far. Historical patterns suggest that stablecoin delistings tend to spark increased interest in more regulated assets. Anchorage's adherence to its "Stablecoin Safety Matrix" reflects a broader trend towards heightened assessment of crypto assets and issuer risks.
Anchorage Digital's decision signals shifting norms in the evaluation of stablecoins and their issuers. In light of evolving regulatory conditions, measures like those taken by Anchorage could have significant ramifications for the market in the future.
