Nansen, a blockchain research platform, has recently reported that the USDC stablecoin has undergone significant changes after burning almost $3 billion worth of tokens, causing the coin to rise back to its previous value of $0.97.
The reason behind the sudden dip in the value of USDC was attributed to the collapse of Silicon Valley Bank (SVB), which was an unprecedented event.
To combat the decline, Circle, the stablecoin company, has burned almost $650 million worth of USDC in the past 24 hours and issued $16.7 million worth of USDC, which helped to restore the value of the coin back to $0.97 after falling to $0.88.
USDC was one of the first casualties of the SVB collapse, as the bankrupt bank had held approximately $3.3 billion worth of these stablecoins, causing USDC to lose its peg to the dollar.
Following the news of the SVB collapse, Circle assured the community that it would continue with standard operations while awaiting clarification on the transfer of SVB assets to the Federal Fund Insurance Corporation (FDIC) and how these actions would affect contributors.
Circle resorted to burning and issuing tokens as just one of the measures to continue providing services to customers. It’s important to note that Circle had earlier admitted that a significant portion of USDC reserves were stored in the Silicon Valley bank.