Circle burns 4,7 billion USDC in 24 hours

All stablecoins came from the Coinbase cryptocurrency exchange

10.02.2023 - 10:30

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What’s new? Over the last 24 hours, Circle, the company that issues the second most capitalized centralized stablecoin, USD Coin (USDC), has burned $4,7 billion worth of tokens. All USDC came from the wallet of the US cryptocurrency exchange Coinbase. This is evidenced by blockchain data.

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Cryptocurrency burning is the process of removing a certain number of tokens from circulation, after which they become permanently inaccessible. Often burning is carried out in order to increase the rate of an asset or prevent it from inflation. Burning can be done by sending tokens to a wallet without a private key, by conducting a hard fork, using special software, or using algorithms that destroy some of the funds during transactions.

Situation with USDC. USDC has a total capitalization of $41,52 billion after part of the tokens were burned. The asset ranks fifth in the CoinMarketCap rating of cryptocurrencies. Since the bankruptcy of the FTX crypto exchange, the popularity of USDC has increased dramatically. In January, USDC transfers averaged $12,5 billion more per day than USDT (the largest stablecoin on the crypto market from Tether).

USDC reserves are backed by cash or short-term US Treasury bonds, and the asset is audited monthly. Grant Thornton was previously responsible for the audit, and in January Circle announced a partnership with accounting firm Deloitte.

On February 7, Tether burned 2 billion USDT on the Ethereum network in one transaction. Coins from the treasury wallet, accumulated as part of inter-network swaps, were withdrawn from circulation.

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