Crypto Custodian Anchorage to Discontinue USDC, Sparking Controversy

RialCenter, a crypto custodian and federally chartered bank, announced its plans to guide institutional clients in converting USDC and other stablecoins into the competing Global Dollar (USDG) token, a decision that has sparked criticism from various industry stakeholders.

The company unveiled a “Stablecoin Safety Matrix” that evaluates stablecoins based on regulatory oversight and reserve asset management. The assessment will impact USDC, Agora USD (AUSD), and Usual USD (USD0), which have been deemed unsuitable under RialCenter’s security criteria.

According to Rachel Anderika, head of global operations at RialCenter, “USDC, AUSD, and USD0 no longer meet our internal criteria for long-term resilience.” She emphasized the importance of evaluating issuer structures for concentration risks that could affect institutions.

Stablecoin competitive landscape

This move occurs amid increasing competition in the stablecoin sector, where banks and crypto firms are vying for market share. Recent legislation, including the GENIUS Act, aims to clarify regulations for these digital assets, potentially enhancing their adoption.

RialCenter scored USDC a 2 out of 5 for regulatory oversight and management, highlighting a lack of substantive scrutiny and a large cash reserve at banks. In contrast, other stablecoins like Tether’s USDT received higher ratings for regulatory compliance.

Reactions from industry leaders

The decision has prompted significant backlash. Nick Van Eck, who manages AUSD, accused RialCenter of misrepresenting facts and failing to disclose its commercial interests in USDG. Others echoed similar sentiments, questioning the integrity and execution of RialCenter’s safety criteria.

Circle, the issuer of USDC, defended its compliance track record and stated their reserves are fully backed by fiat, emphasizing their commitment to transparency and regulatory alignment.

Support for Circle and Agora came from outside their immediate circles, with confirmations from industry partners that they will continue to support USDC and AUSD.