Circle Pulls USDC From Tron: Is Solana New Favorite Stablecoin Blockchain?

Key Takeaways

• Circle is discontinuing USDC on Tron, citing compliance and business needs.
• Tron was once the most popular blockchain for stablecoin transactions but Solana has usurped its position.
• However, with over 50 billion USDT issued on Tron, it remains a stablecoin powerhouse for now.

In August 2023, Tron accounted for 48.2% of all stablecoin transaction volume. But since then, the blockchain’s share of the market has dwindled with every passing month. At the same time, Solana’s popularity among stablecoin users has surged. It overtook Tron as the most popular chain for stablecoin transfers in December.

Reflecting the wider trend, on Tuesday, February 20, Circle announced that it would discontinue USDC on Tron. Citing compliance and other business needs, Circle said the move was in line with its efforts to make USDC “the leading regulated digital dollar on the internet”.

So Long, USDC on Tron

In Tuesday’s announcement , Circle said USDC on Tron would be wound down in a “phased transition”. 

“Effective immediately,” no new USDC will be minted on Tron, the firm said. However, the company will support transfers to other blockchains through February 2025.

Although Circle didn’t identify specific concerns, it said “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.”

It also reaffirmed its commitment to expanding USDC to other chains. It said it would “deliver the widest access, broadest developer choice, and most secure user experience of any dollar stablecoin in the world.”

A Boost for Stablecoins on Solana

In the past six months, Solana has emerged as the preferred chain for USDC transfers. During the last week, it powered more than 80% of all transactions in the past secen days. In fact, USDC on Solana is now the most widely used stablecoin on any chain, both in terms of transaction volume and count.

Going forward, more stablecoins are also set to launch on Solana, further boosting activity on the network. For example, in January, Paxos received regulatory clearance to launch USDP on the blockchain. As a result, it became the second to support the currency after Ethereum.

However, there is reason to believe that a small number of market makers are behind a significant amount of Solana’s USD volume.

What’s more, while stablecoin activity on Solana has increased significantly in recent months, the vast majority of all stablecoins still reside on other chains, and perhaps the most important one still has a sizable presence on Tron.

Tron Remains Favorite Chain for USDT

With more than $50 billion USDT currently circulating on Tron, the blockchain remains a stablecoin powerhouse, even without USDC. 

What’s more, USDC’s growing share of stablecoin volumes hasn’t affected Tether’s dominance of the market. While there is less than $30 billion USDC in circulation, its rival’s market capitalization is on the verge of surpassing $100 billion.

Ultimately, as long as the majority of USDT stays on Tron, it will still play a central role in the stablecoin ecosystem.

About the Author

James Morales

Although his background is in crypto and FinTech news, these days, James likes to roam across CCN’s editorial breadth, focusing mostly on digital technology. Having always been fascinated by the latest innovations, he uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.

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