Anchorage Digital, a federal charter bank that provides Crypto Custody Services, has announced that it will advise institutional clients to switch to Global Dollar (USDG) instead of stupid clients like USDC, Agora USD (AUSD), and regular USD (USD0).
This decision has led to major debate in the crypto industry.
In support of this decision, Anchorage evaluated Stablecoins in its Stablecoin Security Matrix report according to standards such as regulatory oversight and reserved asset management.
“USDC, AUSD, and USD0 no longer meet Anchorage Digital’s long-term durability standards,” said Rachel Anderika, Global Operations Director at Anchorage, in a statement, justifying this decision. Anderika said there is a risk of focusing on the issuance structure behind these assets, and this situation should be considered by institutional investors.
Anderika said Anchorage currently “supports only stubcoins that comply with transparency, independence, security and future regulatory expectations.”
This decision comes at a time when competition in the Stablecoin market is rapidly increasing. The genius law recently passed by the US Senate aims to set clear rules for Stablecoin publishers. White House crypto advisor David Sachs said the bill could become law in July if it passes the House.
Anchorage gave USDC two out of five points in terms of regulatory oversight and preliminary control. The report said the circle held around 15% in bank cash, poses a risk. As you can remember, USDC reduced its dollar by 1 in March 2023 with the collapse of Silicon Valley Bank.
In contrast, the S&P rating gave USDC a “strong” rating, while the crypto-centric Bluechip company gave USDC a B+ rating.
Anchorage’s decision drew backlash from key industry figures. AUSD publisher Nick Van Eck has accused him of “spreading misinformation” and hiding the global dollar’s (USDG) trading profits. The USDG is issued by Paxos and supported by a consortium with Anchorage being a partner.
“If this was just a business decision, I could understand. But trying to smear USDC and AUSD with misinformation is frivolous and weird,” Nick Van Eck said.
Coinbase Protocol expert Viktor Bunin called the decision a “underprepared smear campaign.” Coinbase launched USDC in 2018 with Circle.
*This is not investment advice.
