Circulation of USDC Tether

03/11/2023 03:02 • Daily Digest • 167 views

On March 11, according to PeckShield Alert data, Circle destroyed 2.7 billion USDCs in the past 24 hours, and Coinbase (at least 1.78 billion) and Jump Crypto (about 96 million) redeemed at least 1.87 billion USDCs in the past 24 hours.

Circle destroyed 2.7 billion USDCs in the past 24 hours, and Coinbase redeemed at least 1.78 billion USDCs

Analysis based on this information:

The message reflects the recent changes in the circulation of USD Coin (USDC), a stablecoin that has a 1:1 fiat pegging with the US dollar. According to PeckShield Alert data, Circle, the financial technology company behind USDC, has destroyed 2.7 billion USDCs in the past 24 hours. This act of ‘destruction’ means that the company has revoked the tokens and is no longer accounting for them in circulation. This move can help reduce the risk of over-circulation and maintain the stability of the USDC, which in turn can increase its trustworthiness for investors and traders.

Coinbase, a leading cryptocurrency exchange platform, and Jump Crypto, a high-frequency trading firm, have redeemed at least 1.87 billion USDCs in the past 24 hours, indicating investors’ high demand for USDC. The redemption of the tokens means that they will be removed from circulation and ultimately reduce the supply of USDC, which can potentially affect the market price of the stablecoin.

This recent event highlights the circulation mechanism of USDC, which is based on the principle of “create-redeem.” Companies like Circle create new USDC tokens by locking up an equivalent amount of US dollars in reserves. They then sell or distribute the USDC to users who can, at any time, redeem them for US dollars. This ensures that USDC maintains its pegging with the US dollar and provides a liquidity bridge between traditional finance and the cryptocurrency market.

USDC is gaining popularity in recent times due to the high volatility of cryptocurrencies and the need for a stable value for traders and investors. The token’s transparency, security, and stability have attracted more users towards it, resulting in increased circulation and demand. As of March 2021, the market cap of USDC is over $10 billion, making it the second-largest stablecoin after Tether (USDT).

In conclusion, the destruction of USDC by Circle and the redemption of tokens by Coinbase and Jump Crypto have highlighted the importance of the circulation mechanism of USDC. The mechanism ensures the stability and liquidity of the token, enhancing its trustworthiness for investors and traders.

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Circulation of USDC Tether

Circle destroyed 2.7 billion USDCs in the past 24 hours, and Coinbase redeemed at least 1.78 billion USDCs

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