As of Tuesday night, redemptions of USD Coin (USDC) exceeded $4 billion, resulting in over $2.2 billion worth of USDC being burnt since the beginning of the week.
According to data from Arkham Intelligence, a massive transaction in the early hours of Wednesday saw 723 million USDC burnt, as reported by The Block.
According to data from Arkham Intelligence, there were several other transactions where USDC was burnt, ranging from $300 million to $600 million. In total, over $2.2 billion worth of USDC was burnt in just over a day.
When tokens are sent to an address that is not controlled by any entity, it effectively reduces the number of tokens in circulation, which is referred to as "burning." The recent USDC burns are believed to be a result of a reduction in reserve backing or a surge in redemptions.
On Tuesday, net redemptions of USD Coin (USDC) surpassed $4 billion while Circle, the issuer of USDC, stated that they would continue to process all transactions and honor redemptions.
Last week, the USDC stablecoin, which is pegged to the US dollar, experienced a significant depegging from its intended $1 price after Silicon Valley Bank (SVB), where Circle had deposited over $3.3 billion in treasury assets, was shut by regulators. This led to a loss of investor confidence, resulting in net redemptions crossing the $4 billion mark and over $2.2 billion worth of USDC being burnt in a single day. Circle has pledged to honor all redemptions as it seeks to restore investor trust.
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