Bloomberg reports that on March 13, investors withdrew nearly $1.74 billion from USDC, according to data from the Nansen analytical platform.
This represents more than 2% of the stablecoin’s total working capital. The outflow occurred after USDC lost its peg to the US dollar last week due to Circle, the issuer of USDC, placing $3.3 billion – 8% of the stablecoin’s reserves – in the bankrupt Silicon Valley Bank (SVB).
Andrew Thurman, head of content at Nansen, noted that this is the largest drawdown in stablecoin supply since the BUSD crackdown in early February.
During that incident, the New York State Department of Financial Services (NYDFS) demanded that Paxos Trust stop issuing BUSD due to security violations, resulting in a $916 million outflow from Binance within a day of the announcement.
Institutional investors in USDC are now holding the lowest amount of assets in months, indicating that they are either paying off their holdings or remaining on the sidelines.
Thurman also mentioned that institutional investors still own a substantial amount of USDC, but it appears that those who sold off their holdings are hesitant to return.
Circle CEO Jeremy Allaire announced that the company plans to transfer all remaining deposits from SVB to BNY Mellon accounts.
Additionally, Circle urged the US Congress to speed up the development of regulations for stable cryptocurrencies.