Circle Reveals USDC Stablecoin Redemptions Close to $6 Billion

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Circle’s USD Coin stablecoin continues to experience high redemption rates compared to its purchase rates, even after the recovery of deposits that were stuck during the Silicon Valley Bank’s collapse. On March 20, Circle’s USDC token saw $738.6 million in redemptions, while only $9 million was issued on the Ethereum blockchain, according to CryptoCompare.

Similarly, on the previous day, customers redeemed $23.3 million, while Circle issued $231 million. Since the beginning of March, Circle has burned about $12.2 billion of USDC while issuing approximately half as much on Ethereum.

Although the coin has regained its peg, users continue to dump USDC. Circle’s rival, Tether, has gained market capitalization, rising by more than $6 billion since the beginning of March.

Decentralized finance apps like Curve are also showing an out-of-balance 3Pool, with USDT being in demand while traders exit other stablecoins. Although this may be due in part to the recent market rally, Circle appears to have been affected disproportionately.

The effects of USDC redemptions are also noticeable on decentralized finance platforms, which allow users to trade, lend, and borrow cryptocurrencies without intermediaries. One such platform, Curve, has experienced an imbalance in its 3pool, which is intended to hold roughly equal amounts of USDC, USDT, and DAI stablecoins.

However, since Circle’s issues, USDT’s share has remained small, currently at around 9%, indicating that traders are exiting other stablecoins and seeking Tether. The head of decentralized finance at Wave Digital Assets, Henry Elder, noted that it takes time for Curve pools to rebalance.

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