Circle, the issuer of the USDC stablecoin, has announced a reduction in the number of USDC in circulation.
In the past week, Circle issued 500 million USDC while withdrawing 2.6 billion USDC from circulation, resulting in a $2.1 billion reduction in supply.
As of March 17, there were still $34.6 billion worth of USDC in circulation, and the reserves remained unchanged.
There could be various reasons for the reduction in USDC supply, such as changes in demand, market conditions, or the development of partnerships.
However, Circle has faced challenges after the collapse of Silicon Valley Bank, where the company held about $3.3 billion in assets.
Ideally, the stablecoin should be pegged to the US dollar at a ratio of 1:1. However, after the bank’s collapse, USDC became cheaper for more than a day, falling to $0.85 at one point.
On March 13, Circle returned its money and moved assets to other banks, and USDC returned to its peg to the dollar.
But investor confidence was still affected, as investors disposed of $5.76 billion in USDC on Ethereum since March 13, while Circle released only $874 million.