Circle trims USDC supply by 4.5 billion coins in five days

From March 10, Circle, the co-issuer of the stablecoin USD Coin (USDC), redeemed about 6.2 billion USDC, according to data from Arkham.

The stablecoin operator also issued about 1.66 billion USDC. Therefore the token’s circulating supply fell by 4.5 billion USDC.

On March 11, the stablecoin lost its peg to the U.S. dollar. This occurred after Circle acknowledged that part of the reserves totaling $3.3 billion were held at the authorities-closed Silicon Valley Bank (SVB).

The company immediately said it was using corporate funds and external capital to support the stablecoin.

On Monday it emerged that the company, like other SVB depositors, received full access to the funds.

“Despite Circle launching redemptions and guaranteeing timely fulfillment of obligations, it appears that USDC holders are still nervous about the situation,” said The Block Research’s Steve Zhang.

The market supply of the stablecoin has returned to levels seen in 2021, according to CoinGecko.

As noted, due to the depeg of USDC, lost a number of algorithmic stablecoins such as DAI and FRAX lost their peg.