USDC stablecoin issuer Circle will discontinue support for legacy consumer accounts, the company said on Tuesday.
The USD Coin token is a U.S. dollar-pegged stablecoin, meaning that Circle maintains $1 in reserves—in cash or cash equivalents—to back each of the $25 billion worth of tokens in circulation. USDC is the second-most popular dollar-backed stablecoin behind Tether (USDT), which on Tuesday had a market capitalization of $85 billion, according to CoinGecko.
“Circle is phasing out support for legacy consumer accounts and has notified individual consumers of this decision,” a Circle spokesperson told Decrypt when asked about a screenshot of an email that’s been making the rounds in public Telegram chats. “Account closures do not apply to business or institutional Circle Mint accounts.”
That means Circle will no longer create new accounts for individual retail customers—customers who want to mint USDC will need to do so through an exchange or brokerage. Circle Mint accounts are still available, but only for institutional traders, exchange and wallet companies, and other fintech firms.
Although the announcement stirred some interest on Tuesday, the Circle spokesperson added that the company hasn’t offered consumer accounts for some years.
The stablecoin issuer launched its Circle Mint program—then called Circle Account—in February 2022. At the time, Rachel Mayer, vice president of product at Circle, said the goal was to make the accounts the “go-to destination for payments and treasury activity.”
Circle has seen USDC’s market cap shrink a great deal since launching the program in 2022. At the time, there were roughly $53 billion worth of USDC tokens in circulation. A few months later, in June 2022, the Boston firm’s stablecoin hit an all-time high market cap of $56 billion. For a while, it looked like USDC was primed to catch up to—or possibly overtake—its rival USDT.
But confidence in USDC was dealt a heavy blow in March 2023, when Circle disclosed it had more than $3 billion worth of its reserves sitting in accounts at Silicon Valley Bank. The bank had just been shuttered by California banking regulators following a bank run.
It was one of many crypto firms to disclose exposure to SVB. The list also included now-defunct crypto lender BlockFi, Avalanche, Proof, and Yuga Labs.
The scare among investors caused USDC to temporarily lose its dollar peg as the price dropped to $0.87—setting a new all-time low for its price. Meanwhile, investors have been redeeming more USDC than usual during the bear market. That means they’ve been closing out crypto positions and converting their funds back to fiat currency, such as the U.S. dollar.
That all led to a steadily declining market cap for USDC, despite news that Coinbase had acquired a stake in Circle or efforts to grow the USDC’s user base in Latin America.
Editor's note: This story was updated to clarify that Circle Mint was a rebranding of Circle Account and that USDC tokens, not Circle, lost their peg in March 2023.