USDC Circulating Supply Drops by $9 Billion in Three Months

The total supply of the stablecoin USD Coin (USDC) has decreased from $55.55 billion to $46.57 billion over the past 90 days.

According to DeFiLlama, USDC issuer Circle has burned approximately $9 billion of its stablecoin over the past three months.

This represents the largest amount of destruction within any 90-day period for the second-largest stablecoin on the market. The burning of USDC occurs when users redeem the stablecoin for fiat currency, such as USD. The company then sends the redeemed tokens to a burn address, permanently removing them from the blockchain system.

This move coincides with a notable decrease in interest rates offered by major DeFi platforms for stablecoin lending. Data from LoanScan shows that borrowing rates for USDC on platforms like Compound and Aave have dropped by over 70% since the beginning of the year.

DeFi lending rates have even fallen below those provided by traditional financial markets, especially with the Federal Reserve raising rates from 2.5% to 3.25% last month.

While the supply of USDC has decreased, the supply of Tether (USDT) has increased during the same period. The circulating supply of USDT has risen by over $2 billion since early July. Tether’s dominance in the stablecoin market has also reached a three-month high of 45.9%.

Market Cap Fluctuations for USDC and USDT Over the Last Three Months

Circle has recently announced plans to enhance user transaction capabilities with USDC across multiple chains. The company has launched a protocol enabling users to seamlessly transfer USDC across supported networks.