$4.7 Billion USDC Burned in the Last 24 Hours

Recent large-scale USDC burns by Circle, the issuer of the stablecoin, are raising concerns in the crypto community amid news of increased regulatory scrutiny on stablecoins in the US.

According to Peckshield, the USDC stablecoin has been experiencing unusual activity with frequent large-scale mint-burn transactions.

In the past 24 hours, a wallet address withdrew $4.7 billion USDC from Coinbase, then transferred it back to Circle’s wallet. Circle subsequently sent the stablecoin to a burn address, resulting in its destruction.

In this transaction chain, the address 0xad4ac4eb660d2b2d78a062bf136610af15defd80 served as an intermediary for USDC between Coinbase and Circle. This wallet has been operational for a long time, handling transactions regularly, but saw a sudden surge in volume over the past day.

Data aggregator 0xWatcher confirms that Coinbase received $4.7 billion USDC during this period, suggesting that these transactions are unlikely to be related to institutional investors converting USDC back to USD. There are no alarming signs associated with these activities.

?Although it seems @coinbase processed a ~$4.5B $USDC burn it also received a similar amount (~$4.7B).

The net USDC flow of this @coinbase address is +$330M in the past 24H.

Steady lads. https://t.co/L1VRAKU1FQ pic.twitter.com/JIKPs3io6X
— 0xScope (? . ?) (@ScopeProtocol) February 10, 2023

Data from CoinMarketCap and CoinGecko shows that the USDC supply has remained around $41.4 – $41.7 billion over the last 24 hours, without any fluctuations reaching $4 billion. The price of USDC remains stable at $1.

USDC's supply peaked at over $55 billion in June 2022, then gradually decreased in the latter half of 2022 due to market disruptions, settling around $41.5 billion as of now.

The timing of these USDC transactions by Circle is quite "sensitive," as reports emerged this morning that another stablecoin issuer, Paxos, is under investigation by New York authorities for undisclosed reasons.

Read more: Paxos Under Investigation by New York Authorities

Conversely, some speculate that these transactions may be related to the testing of the Cross-Chain Transfer Protocol (CCTP), a blockchain bridge solution Circle is testing on Ethereum and Avalanche, with a launch expected in Q1 2023.