Circle, one of the top crypto startup companies and issuer of the USD Coin (USDC) has released a statement that the company is likely to experience slow growth due to the pressure on Circle from competitors that was caused by the conversion of USDC into BUSD.
Circle claimed that the automatic conversion of USDC that was held in Binance wallets has decreased the circulation of USDC as of September 30. This was stated in a filing with the United States Securities and Exchange Commission (SEC) on November 14.
In the filing to the SEC, Circle also stated that the USDC stablecoin has declined in circulation with an estimated value of $8.3 billion between the period of June 30 to September 30. Circle pointed out that $3 billion of the $8.3 billion can be attributed to the Binance auto conversion.
The company highlighted that its business will be grossly affected if Circle stablecoins do not grow as projected.
The slow growth in Circle’s finance can also be attributed to the collapse of FTX as it has exposed the company to higher risks in the broader crypto market. Other factors include low prices of crypto as well as higher interest rates.
The Conversion of USDC into BUSD
Binance, the biggest exchange platform in the world and issuer of the BUSD stablecoin issued a statement in September that it was going to convert its customers’ assets held in USDC, True USD (TUSD), and Pax Dollar (USDP) into BUSD stablecoin. Binance added that the conversion was done to increase liquidity and ensure capital is efficiently utilized for its users.
WazirX, one of the largest bitcoin and crypto exchange platforms in India also released a statement in an article to convert USDC stablecoin into BUSD. WazirX highlighted that users’ balances in USDC will be visible to them under their BUSD account when the conversion is complete. The news of the conversion comes shortly after Binance stated its intention to do the same.
1/ Another exciting announcement just shared at #ConvergeSF22 👀 we intend #USDC to be available on @arbitrum @cosmos @NEARProtocol @optimismFND @Polkadot pic.twitter.com/OKR8Scq6yY
— Circle (@circle) September 28, 2022
Circle has however continued to strive for relevance in the blockchain industry after its stablecoin was delisted by Binance and Waxir. Circle made an announcement that it was ready to expand into five major blockchains which include Arbitrum, Cosmos, NEAR, Optimism, and Polkadot. Circle believes that the inclusion of the USDC into these blockchains will make it simpler for developers to create new applications for users.
