Crypto Custodian Anchorage Phasing Out USDC Use

As Coindesk reported Friday (June 27), this move has provoked sharp criticism from USDC-issuer Circle and other crypto sector players.

The decision followed the recent release of Anchorage’s “Stablecoin Safety Matrix,” which ranks stablecoins based on regulatory oversight and reserve asset management. In addition to USDC, the company is also moving away from two other tokens: Agora USD (AUSD) and Usual USD (USD0).

“Following our Stablecoin Safety Matrix, USDC, AUSD, and USD0 no longer satisfy Anchorage Digital’s internal criteria for long-term resilience,” Rachel Anderika, head of global operations at Anchorage, said in a statement explaining the decision. “Specifically, we identified elevated concentration risks associated with their issuer structures — something we believe institutions should carefully evaluate.”

She added that the company wanted to support “stablecoins that demonstrate strong transparency, independence, security, and alignment with future regulatory expectations.”

As CoinDesk noted, Anchorage’s report contended that USDC had “no substantive prudential oversight” and that Circle had a large — roughly 15% — amount of its reserves held in cash at banks. Industry figures pushed back against the findings, the CoinDesk report added.

“Never seen such an obvious hit piece be so poorly executed,” said Viktor Bunin, protocol specialist at crypto exchange Coinbase, which launched USDC with Circle.

Circle issued a statement to CoinDesk defending its compliance record, saying that it follows “prevailing U.S. regulatory standards that apply to leading fintech and payments firms, and we were the first stablecoin issuer to achieve full compliance with the European Union’s landmark crypto law.”

The news comes at a moment when “stablecoins are at a crossroads,” as PYMNTS wrote last week following a Bank of International Settlements (BIS) report which questioned their utility as a form of money.

“On one hand, they’ve gone from niche crypto tools to serious considerations by legacy financial institutions. On the other, they continue to fail the basic tests of stability, acceptability, trust and utility,” that report said.

The BIS isn’t wrong in its criticisms, PYMNTS added, nor are companies like Mastercard and Visa off-base in looking into stablecoins’ potential. As is the case with any major technological, the early stages are rocky.

“For stablecoins to truly work as money, and not just as digital chips in a speculative casino, they’ll need to overcome deep infrastructural, compliance and economic hurdles, which may take years,” the report added. “But the groundwork is being laid, and the attention stablecoins are getting from the financial establishment is no accident.”