According to the Web3 Watchers analysis platform, its issuer, Circle sent a total of 314.167 million USD Coin (USDC) to Ethereum null address with header 0x00 on March 13. The null address is often used to remove tokens from circulation through one-way transactions.
Stablecoin Burn Alerts:
314,167,155.05 $USDC ($311,419,134) just burned by #circle
Tx: https://t.co/ggqMMIhwS8— Watchers ( . ) (@0xWatchers) March 13, 2023
On March 12, Circle announced that, following a joint announcement by US Treasury Secretary Janet Yellen and other regulators, all Silicon Valley Bank (SVB) depositors – representing $3.3 billion, or 8% of the SVB’s total reserve – would be “fully available” when US banks open on March 13. Jeremy Allaire, co-founder and CEO of Circle, commented:
“Trust, security, and the 1:1 redeemability of all USDC in circulation are of the utmost importance to Circle, even in the face of bank contagion affecting crypto markets. We are encouraged to see the US government and financial regulators take crucial steps to mitigate risks spilling over from the banking system.”
USD Coin was designed to be redeemable 1:1 with US dollars, and its tokenomy is dictated by fiat collateral in proportion to the minting and burning of new tokens. On March 10, the token broke up after Circle’s custodian bank, SVB, suffered a banking crisis following a series of failed leveraged long positions in the US Treasury, forcing federal regulators, including the Federal Insurance Corporation of Deposits, to intervene.
At press time, USDC was trading at $0.9958, up from a record low of $0.87 two days earlier. Circle has stated that, in the event of a shortfall, it will use corporate funds and outside capital, if necessary, to defend USDC. Some crypto whales would have sold USDC lower during the unpegging event, causing heavy losses.
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