• Over $2.2 billion worth of USD coin (USDC) was burnt in a single day, with 723 million USDC being burnt in a single transaction.
• The USDC burns followed a likely reduction in reserve backing or redemptions, as net redemptions of USDC crossed the $4 billion mark on Tuesday.
• Last week’s depegging caused investors to avoid the dollar-pegged stablecoin.
Over $2.2 billion worth of USD coin (USDC) was burnt since the start of this week as redemptions crossed $4 billion on Tuesday night. Some 723 million USDC were burnt in a single transaction in early Asian hours on Wednesday, as per The Block, which cited Arkham Intelligence data. This brought the total burnt value of USDC to over $2.2 billion in a little over a single day.
Burns refer to effectively taking tokens out of circulating supply by sending them to an address that’s not controlled by any entity. The USDC burns followed likely reduction in reserve backing or redemptions, while Circle Internet Financial’s USDC stablecoin massively depegged from its intended $1 price on Friday night after Silicon Valley Bank (SVB), where Circle parked over $3.3 billion in treasury assets, was shut by regulators.
Net redemptions of USDC crossed the $4 billion mark on Tuesday night as issuer Circle said it would process all transactions and honor redemptions for those who requested it during this period of time when investors are avoiding the dollar-pegged stablecoin due to last week’s depegging event..
Circle Internet Financial’s USDC stablecoin massively depegged from its intended price last week after Silicon Valley Bank (SVB), where Circle parked over $3 billion in treasury assets, was shut down by regulators resulting investors avoiding this token temporarily due to uncertainty created around it last week..
To conclude, we can say that over $ 2 . 2 billion worth of USD coin (USDC) was burnt since the start of this week and it indicates that there is reduction in reserve backing or redemption which is causing investor confidence crisis and making them avoid using dollar pegged stablecoins for now until more clarity emerges around them after further investigation into the incident that caused massive depegging last week