Circle CEO slams Tether as "shadow banking solution for China"

The CEO of crypto company Circle, Jeremy Allaire, denounced stablecoin competitor Tether in a tweetstorm today. 

Allaire said that Tether is “an attractive option as an unregulated offshore USD shadow banking solution for China and Asia. It's greatest feature is its non-compliance and opacity.” Indeed, in September 2019, Bitfinex, the Hong-Kong crypto exchange that shares its CEO with stablecoin issuer Tether, launched a new stablecoin, CHNt, which is tied to the offshore Chinese Yuan.

Allaire used the opportunity to point out the failure of other stablecoins. “PAX [a stablecoin issued by Paxos] has flat-lined at $240M, TUSD [TrueUSD] in rapid decline and GUSD [Gemini Dollar, the stablecoin issued by the Winklevoss twins’ company]  and BUSD [Binance’s stablecoin] are DOA.”

But, as Allaire said, “the market is speaking for itself.”

The stablecoin that Allaire’s company makes, USDC, is far less popular than Tether. According to data metrics site CoinMarketCap, USDC has a market cap of $515,674,510 and Tether has a market cap of $4,124,323,104; that makes Tether’s market cap around eight times as big as USDC’s. 

In addition, Circle’s closed down or sold off much of its business in 2019. Circle announced last month that it sold its Circle Trade OTC business to the crypto exchange Kraken, and confirmed that it’s stold off its exchange, Poloniex, into a standalone business backed by an Asian investor. Poloniex took more than 80 Circle employees with it.

In 2019, Circle also shut down its Circle Pay application. Its co-CEO, Sean Neville, stepped down as “independent director on the Circle Board of Directors,” and its Chief Financial Officer, Naeem Ishaq, as well as its Chief Legal Officer, Gus Coldebella, have jumped ship.

Still, at least Circle’s record is clean over USDC. Tether and its sister company Bitfinex are still currently under investigation by the New York Attorney General for using the stablecoin to hide an $850 million hole in its finances and allegedly defrauding its customers.