Tron-Based Stablecoins Lose Relevance

Colin Wu, a well-known Chinese journalist and cryptocurrency expert, learned that in China, people do not want to mess with stablecoins that are implemented on the Tron blockchain. He learned about it from his own sources.

Colin elaborates that over-the-counter exchanges in China are increasingly refusing to serve customers who want to receive services using the TRC20 (Tron) standard. The reason for this was some doubts about the purity of digital assets. Local exchangers ask customers to exchange assets for a currency in ERC20 standards (Ethereum), and then contact them again to receive the service.

It is noteworthy that cryptocurrency lending firm Matrixport has completely stopped supporting TRC20-based USDT, but so far there have been no official announcements regarding this news. According to Colin Wu, many people are worried that the TRC20 standard has failed to pass the necessary anti-money laundering requirements of the American firm Chainanalysis. What specific requirements are currently unknown.

Justin Sun, who founded the Tron blockchain, has not yet commented on the information about the refusal of exchangers to work with cryptocurrencies on TRC20. In contrast to these statements, Sun published several posts on his Twitter account in which he spoke about how good and fruitful the cooperation between Tron and Tether, which created USDT, can be called. Representatives of Tether, in turn, have so far refrained from making any comments, but reposted Justin Sun's publications.

For USDT, this is not the first news in which they are present as a household name. Earlier it became known that the cryptocurrency platform Crypto.com decided to list USDT for clients from Canada. Top management did not comment on the reasons why this decision was made.

According to some assumptions, Crypto.com resorted to such actions in order to avoid violating the rules of the Ontario Securities Commission. On this cryptocurrency platform, on January 31, all possible transactions related to USDT will disappear, and the balance of deposits will be converted into USDC stablecoins.

Tether has been repeatedly criticized in 2022. Major hedge funds, including Fir Tree Capital Management, Valiant and Viceroy Research, decided to go short on this currency. Every month more and more institutional investors come to such conclusions and decisions.

Last year showed that many stablecoins lost their peg to the dollar, and Tether on TRC20, according to institutions, could be the next such coin. The reason for such assumptions was rumors about possible internal problems of the company with liquidity. In addition, it is known that the American regulator previously fined Tether for providing financial statements that do not correspond to the real state of affairs.