The USDC blacklist incident has attracted follow from the DeFi industry.

Recently, a centralized stablecoin issuing institution blacklisted a certain address, which has sparked widespread discussion in the cryptocurrency community, especially in the rapidly growing Decentralized Finance (DeFi) sector.

In March of this year, the COVID-19 pandemic caused turmoil in the cryptocurrency market, and the decentralized stablecoin DAI was also affected. In response to this situation, the MakerDAO community decided to introduce a stablecoin pegged to the US dollar as collateral. However, the potential risks of this decision have recently come to light. The stablecoin issuer suddenly blacklisted an address and froze approximately $100,000 in funds at that address at the request of law enforcement.

It is understood that when an address is blacklisted, it will not be able to receive or transfer the related tokens. This incident has raised questions about the level of decentralization of DAI. The CEO of a lending protocol pointed out that if the blacklisted funds are in a Maker Vault, it may affect the peg of DAI to the US dollar.

Industry insiders believe that although DAI can withstand financial risks, if its collateral can be blacklisted, it may affect the underlying operation of DeFi protocols.

Analysts point out that although this is the first time the stablecoin has encountered a "blacklist crisis", it is not the first case in the cryptocurrency industry. It is reported that another major stablecoin issuer has blacklisted 39 Ethereum addresses since November 2017, involving amounts of several million dollars.

The practice of these centralized companies choosing to cooperate with law enforcement and unilaterally blocking relevant transactions conflicts with the decentralized principles advocated by cryptocurrencies. However, according to policy documents, failing to do so may pose a threat to the stablecoin network.

Industry experts indicate that while a small amount of frozen transactions may not affect the market position of stablecoins, if this practice becomes the norm, it could set a bad precedent. They are concerned that if stablecoins with "backdoors" are widely adopted, regulators may gain greater control.

Venture capitalists have pointed out that the DeFi industry still has centralization issues. They believe that if the issuer of stablecoins is a centralized entity, it could arbitrarily block transactions or freeze assets. Some investors prefer projects with more decentralized power.

Finally, experts concluded that this event highlights the continuous growth of demand for Bitcoin on a global scale. Although Bitcoin remains highly volatile, it still possesses unique advantages as an indivisible and unstoppable value transfer tool. Of course, this is provided that users avoid trading on centralized exchanges.