Circle USDC Circulation Discount Up To $200 Million Last Week

The depegging occurred when Circle, the issuer of USDC, announced that around $3.3 billion in cash reserves backing USDC are still held at Silicon Valley Bank, which was closed down by California banking authorities after a bank run.

Other, smaller-circulation stablecoins, such as BUSD issued by Paxos and crypto-backed stablecoin DAI released by MakerDAO, also lost their pegs. Only USDT seems to gain from the turbulence, momentarily surpassing $1, most likely as a result of investors exiting the depegged stablecoins.

The crypto market has rebounded significantly in the weeks after the loss of a succession of US banks as well as the Credit Suisse crisis, but the same cannot be said for USDC.

According to official data, in the past 7 days, Circle issued a total of $600 million in USDC and redeemed $2.5 billion in USDC, and the circulation decreased by about $1.9 billion.

As of March 30, the total circulation of USDC was $32.6 billion, and the reserve was $32.8 billion, including $4.4 billion in cash and $28.4 billion in short-term US treasury bonds.

Source: Circle

However, the DeFi market has not lost its power because of that. Uniswap had $13.3 billion in volume on March 11, while Coinbase had $1.7 billion. This is what marks the prominence of DeFi platforms keeping concerns about financial risk centralized.

There is also rising interest in investigating potential solutions to the flaws of stablecoins. USDC is currently still trading at the “stable” $1 peg, but the drop in circulation shows that money has shifted to rival stablecoins like USDT.

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