314M USDC sent to null address as redemptions begin: Report

314M USDC sent to null address as redemptions begin: Report

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According to Web 3.0 analytics platform Watchers (0xscope), its issuer, Circle, sent a total of 314.167 million USD Coin (USDC) to the Ethereum null address with the header 0x00 on March 13. The null address is typically used to remove tokens from circulation through one-way transactions.

The day before, 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 total USDC reserve, will be “fully available”. when US banks open today. Jeremy Allaire, Co-Founder and CEO of Circle, commented:

“Trust, security, and the 1:1 redemptability 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 fiat US dollars, and its tokenomics are dictated by fiat collateral in proportion to the minting and burning of new tokens. On March 10, the token was depegged after Circle’s custodian bank, SVB, suffered a run on the bank following a series of failed leveraged long positions in the US Treasury, forcing federal regulators, including the Federal Deposit Insurance Corporation, to intervene.

At press time, the USDC is currently trading at $0.9958 a piece compared to 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 reportedly USDC sold at the bottom during the takeoff event, causing heavy losses.