Anchorage Digital Phases Out Three Stablecoins Citing Regulatory Concerns

Anchorage Digital, a prominent player in the cryptocurrency industry, has recently announced plans to phase out support for three stablecoins: USDC, Agora USD (AUSD), and Usual USD (USD0). The decision, which has sparked criticism from at least one stablecoin issuer, is based on what Anchorage describes as "regulatory expectations" and an internal risk assessment.

Nick van Eck, co-founder and CEO of Agora, took to X to criticize Anchorage’s move, asserting that the decision was grounded in "easily verifiable and known factual inaccuracies." Van Eck further alleged that Anchorage failed to disclose its relationship with stablecoin issuer Paxos, which could potentially benefit from the phasing out of tokens issued by other platforms.

Anchorage, one of the first crypto companies to hold a US banking charter, introduced a stablecoin "safety matrix" to evaluate tokens based on regulatory guidelines for their issuers. This matrix is part of a broader effort to prepare for potential US government legislation, such as the Guiding and Establishing National Innovation for US Stablecoins (GENIUS Act). The company stated that the assessment included evaluations of the stablecoins' liquidity, depeg history, and concentration risk, concluding that USDC, AUSD, and USD0 do not meet regulatory expectations.

Rachel Anderika, Anchorage Digital’s head of global operations, explained that the stablecoins no longer satisfy the company’s internal criteria for long-term resilience. Specifically, Anchorage identified elevated concentration risks associated with their issuer structures, a factor that institutions should carefully evaluate.

The GENIUS Act, which aims to provide a regulatory framework for stablecoins in the US, is closer to becoming law after passing the US Senate. The bill is expected to be signed by the President with "no add-ons" from the House of Representatives.

The move by Anchorage has significant implications for the stablecoin market. Combined, AUSD and USD0 make up a tiny slice of the market, with around $700 million in value compared to USDC’s $61 billion. Circle, the issuer behind USDC, recently made its Wall Street debut, drawing strong investor interest as stablecoins continue to move toward broader institutional adoption.

Van Eck criticized Anchorage’s attempt to delegitimize AUSD and USDC for "security concerns," claiming that the company knowingly published false information. He suggested that if Anchorage had simply delisted USDC and AUSD to prioritize stablecoins in which it has an economic interest, it would be understandable as a business decision. However, he found the current approach to be "unserious and bizarre."

The controversy surrounding Anchorage’s decision highlights the complex regulatory landscape for stablecoins. Many issuers based outside the US have made efforts to meet updated regulatory guidelines in different jurisdictions, but some have intentionally skipped compliance. Paolo Ardoino, CEO of stablecoin company Tether, the issuer behind USDt, stated that he had no plans to register under the European Union’s Markets in Crypto-Assets (MiCA) framework, claiming it was risky for stablecoins. Some exchanges have already delisted USDt and other stablecoins to be MiCA-compliant.