Bitwage, a cryptocurrency payroll company, has announced it will remove USDC-based payments for U.S. residents. In an email sent to U.S.-based customers, Bitwage explains removing the second-largest stablecoin by market cap from its platform is related to a “more strict regulatory climate” in the U.S. regarding crypto.
Bitwage Drops USDC Payments in the U.S.
Crypto payroll solutions company Bitwage has announced that it will drop USDC from its supported currencies for U.S. residents. In an email sent to customers affected by the measure, Bitwage informed that the company would be disabling this kind of payment due to a “more strict regulatory climate” in the country.
The email, sent to customers on July 5, advises customers using USDC as a means of payment to remove it from Bitwage’s platform.
The company explained that if not withdrawn by July 13, affected customers would have all their wallets and bank accounts reset on the platform, forcing them to set up their payment data again before collecting their next paycheck.
Bitwage also informed this measure would only affect U.S. residents and that other customers would be unaffected. It further highlighted that U.S.-based customers will continue to receive payments using bitcoin and other stablecoins, including DAI, CUSD, and USDT, without further details.
Causes and Effects of the Measure
The issue of stablecoins and the advantages and risks involved in their utilization has been in the sight of regulators since the collapse of UST, the native stablecoin of the Terra ecosystem. In June, the House Financial Services Committee released a third draft of a stablecoin bill, which has been one of the priorities of Committee Chair Patrick McHenry.
Matt Ahlborg, a market research consultant at Bitrefill, stated the immediate effect of these regulatory changes in the U.S. regarding stablecoins might cause people to consider other, non-stablecoin options for receiving payments.
Ahlborg explained:
Utility usage of BTC has waned in recent years as stablecoins gained ground, but increasing restrictions on stablecoins will likely swing the pendulum back towards BTC.
Bitwage’s actions in the U.S. are very different from what the company does outside the country. In June, Bitwage announced a partnership with Vibrant Wallet to make the payments process seamless, advertising USDC on the Stellar blockchain as an enabler of “seamless, near-instant, low-cost cross-border payments, remittances, and next-gen treasury management.”
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