Table of Contents:

· Previous signs indicate that Circle has planned to close personal accounts

· Competitor Tether still supports personal accounts

· Circle says "This is not new"

BlockBeats News, on October 31st, Circle, the issuer of stablecoins, will stop supporting consumer Circle Mint accounts. This means that users who want to mint Circle stablecoins such as USDC and EURC will need to turn to other platforms.

This indicates that Circle had planned to close personal accounts earlier

According to an email received by Circle customers, the stablecoin issuer Circle will close consumer or individual accounts on November 30th. However, enterprise and institutional accounts will remain open.

This has sparked community attention, and many speculate that this may be due to depletion of reserves or as part of cost-cutting and restructuring activities. Circle officials stated that they discontinued their customer application in September 2021 and are now phasing out these old personal consumer accounts. However, Circle refers to these personal accounts as "traditional consumer accounts," indicating that they are no longer frequently used.

Regarding this, Jeremy Allaire, co-founder, chairman, and CEO of Circle, pointed out in Circle's USDC economic report that digital dollar currencies, such as USDC, may begin to absorb a significant portion of the over $2 trillion payment industry revenue and become a new digital representation of the $21 trillion M2 money supply. In addition, over 85% of respondents prioritize the use of digital currency for payments. Many traditional payment providers, including Checkout.com, Mastercard, Plaid, Stripe, Visa, and FIS's Worldpay, are partnering with USDC.

Related reading: "Circle releases first annual "USDC Economic Status" report"

Additionally, on July 13th, Circle stated that the company has made slight layoffs to maintain a "strong balance sheet." A spokesperson for Circle stated, "To maintain a strong balance sheet, Circle is doubling down on core business activities and execution. As a result, we have reduced or eliminated investments in non-core activities and reduced operating expenses, including a slight reduction in headcount. At the same time, we have identified new areas of investment and continue to hire in key focus areas globally."

However, on February 23rd, Circle's CFO Jeremy Fox-Geen stated that "the company had about 900 employees as of the end of last year, and is expected to increase by 15% to 25% by 2023, adding 135 to 225 employees." At the time, Fox-Geen also stated that Circle plans to go public again.

Related reading: "Review of Circle: Financing with the story of Bitcoin, going public with the story of stablecoins"

At the beginning of the year, it was vowed to increase the staff's Circle, but the original intention was violated after only 5 months. Perhaps the reason, as speculated by co-founder of Eastern Hill Capital, @anthbennett, is that "Circle may only be trying to cut costs."

Of course, on the other hand, it may be related to regulatory risks. BlockBeats reported on May 19th that stablecoin issuers, including Tether, Circle, and other companies, have spent over $1 million lobbying lawmakers on Capitol Hill since early 2022, according to BlockBeats.

According to the public interest media ProPublica, Tether has hired the law firm of Michael Jason Lee to conduct lobbying work. Since early 2022, Tether has spent about $600,000, with quarterly spending of $120,000 on lobbying the US Senate and House of Representatives. Meanwhile, Circle began working with strategic consulting firm Invariant for lobbying work at the end of 2021, and has since spent at least $560,000. The company's quarterly lobbying budget is currently $100,000.

Competitor Tether still supports personal accounts

It is worth mentioning that Circle's competitor Tether still supports personal consumer accounts, but the minimum amount is $100,000.

Tether CEO Paolo Ardoino stated in an interview with The Block that "Tether allows individuals and corporate clients to participate in its primary market issuance and redemption." Additionally, "Tether maintains a minimum issuance and redemption limit of $100,000, allowing the Tether compliance team to focus on professional participants and conduct more thorough KYC/AML due diligence compared to competitors."

According to The Block's data dashboard, Tether remains the largest stablecoin issuer in the market, with a total supply of approximately $91 billion USDT tokens, while Circle follows closely behind with a total supply of approximately $27 billion USDC.

Related reading: "Dialogue with Tether CTO: Revealing the Truth about Stablecoin Reserves".

Regarding Tether's source of profit, Tether currently has a market value of $83 billion, and the company has accumulated over $3.3 billion in additional reserves in the past few quarters. Paolo pointed out that although the current high interest rate environment is favorable for Tether, this situation will not last forever.

Paolo mentioned that Tether's investment portfolio holds about $1.5 billion in Bitcoin. Despite having over $3.3 billion in additional capital, even if the value of Bitcoin drops to zero, Tether still has more funds than all of its issued tokens. In addition, Tether also holds gold as part of its reserves.

Circle 表示「This is not new"

Translation:

Circle represents "This is not new"

In the "Basic Elements of Stablecoins" roundtable discussion at the "2023 Hong Kong Web3 Carnival" in April of this year, Joao Reginatto, Vice President of Product at Circle, stated that the vision for USDC is to become an open platform that every developer can use.

However, regarding Circle's decision to close consumer accounts today, Jeremy Allaire tweeted that "Circle has not allowed individuals to open Circle accounts for many years." He also reminded netizens to ignore FUD, conspiracy theories, and the like.

Currently, Circle has not provided any explanation for this move and only responded by saying "this is not any new news".

Circle discontinued its customer application in September 2021 and is now phasing out these old personal consumer accounts. Account holders can continue to redeem USDC through Circle until November 30th. After that, individuals looking to buy or redeem USDC can obtain services through retail exchanges, brokers, or wallet services.

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