Bitwage, a company that facilitates cryptocurrency payroll, has recently made the decision to discontinue USDC-based payments for residents of the United States. In an email sent to affected customers, Bitwage cited a “more strict regulatory climate” surrounding cryptocurrencies in the US as the reason behind this move.
According to the email sent on July 5, Bitwage advised customers who were using USDC as a payment method to withdraw their funds from the platform. If not withdrawn by July 13, customers would have their wallets and bank accounts reset, requiring them to set up their payment information again before receiving their next paycheck.
It’s important to note that this change only affects US residents, and other customers will not be impacted. Bitwage clarified that US-based customers will still be able to receive payments using other cryptocurrencies like bitcoin, DAI, CUSD, and USDT, without providing further details.
The decision by Bitwage to phase out USDC payments for US residents can be attributed to the increased attention regulators have been paying to stablecoins and the potential risks and benefits associated with them. This focus has intensified following the collapse of UST, the native stablecoin of the Terra ecosystem. In fact, the House Financial Services Committee recently released a third draft of a stablecoin bill, which has been a key priority for Committee Chair Patrick McHenry.
Matt Ahlborg, a market research consultant at Bitrefill, noted that these regulatory changes in the US regarding stablecoins may prompt individuals to explore alternative payment options that are not reliant on stablecoins. Ahlborg suggested that as restrictions on stablecoins increase, there could be a shift back towards using bitcoin for utility purposes, as stablecoins had gained popularity in recent years.
It is worth mentioning that Bitwage’s actions in the US differ from its operations outside the country. In June, the company announced a partnership with Vibrant Wallet to facilitate seamless payments, promoting the use of USDC on the Stellar blockchain for efficient cross-border payments, remittances, and treasury management.
Frequently Asked Questions (FAQs) about USDC payments
Why is Bitwage discontinuing USDC payments for US residents?
Bitwage is discontinuing USDC payments for US residents due to a “more strict regulatory climate” surrounding cryptocurrencies in the United States. The company is taking this action in response to the increased attention and potential risks associated with stablecoins and the regulatory scrutiny they have been facing.
Will this change affect all Bitwage customers?
No, this change will only impact US residents who were using USDC as a payment method through Bitwage. Customers from other countries will not be affected and will still be able to receive payments using other supported cryptocurrencies like bitcoin, DAI, CUSD, and USDT.
What should customers who were using USDC payments do?
Customers who were using USDC payments through Bitwage are advised to withdraw their funds from the platform before July 13. Failure to do so will result in their wallets and bank accounts being reset, requiring them to set up their payment information again to receive their next paycheck.
Are there any alternative payment options for US residents?
Yes, Bitwage mentioned that US residents will still be able to receive payments using other cryptocurrencies such as bitcoin, DAI, CUSD, and USDT. These alternatives will remain available for US customers despite the discontinuation of USDC payments.
What impact might this change have on the use of stablecoins and cryptocurrencies?
The change by Bitwage reflects the growing regulatory concerns and restrictions surrounding stablecoins. As stablecoins face increased scrutiny, it is possible that individuals may consider exploring non-stablecoin options, such as bitcoin, for receiving payments. This shift could potentially lead to a renewed interest in bitcoin and other non-stablecoin cryptocurrencies for utility purposes.
More about USDC payments
- Bitwage Official Website
- USDC (USD Coin) Official Website
- House Financial Services Committee
- Terra Ecosystem
- Stellar Blockchain