Reduction of USDC circulation: Circle reveals data on verification and reserve security

Circle has announced significant fluctuations in the circulation of its stablecoin USDC over the past few days. Amid discussions about verification and the reliability of digital assets (similar to how a SIM card ensures user identification), the platform has released detailed data on the issuance and buyback dynamics of its tokens. According to official reports, by January 21, the circulation of USDC decreased by 1.4 billion coins, indicating certain market changes in the stablecoin sector.

Issuance and Buyback Dynamics: How the USDC Supply Changed

According to data from Circle and analysis by PANews, by January 21, the issuer had issued approximately 4.8 billion USDC and simultaneously repurchased about 6.2 billion coins. This asymmetric buyback led to a net reduction in circulation of 1.4 billion USDC. At the time of the report, the total circulation was 74.4 billion coins.

However, according to the latest data as of January 30, the USDC circulation decreased to 70.14 billion coins, indicating a further reduction of 4.26 billion over the past nine days. This trend may signal a market re-evaluation of demand for stablecoins or a redistribution of capital across different platforms.

Circle Reserve Structure: How User Investments Are Secured

Circle guarantees that each USDC token is fully backed by reserves in US dollars. As of the latest report, reserves amounted to $74.5 billion and consisted of several components:

• Overnight repo agreements: $47.8 billion (the largest portion) – short-term repurchase agreements with leading financial institutions
• US Treasury bills (up to 3 months): $16 billion – the most reliable asset class
• Deposits in systemically important banks: $9.9 billion – in authorized financial institutions
• Other bank deposits: approximately $800 million

This diversification of reserves aims to ensure system reliability and the quick exchange of tokens for real money when necessary.

What Does the Reduction Mean: Stability or Capital Reflow?

The decrease in USDC circulation does not necessarily indicate issues with the reliability of the Circle platform. On the contrary, such dynamics may reflect a healthy market where users actively reallocate assets based on current needs. Simultaneous reduction in circulation and full reserve backing demonstrate Circle’s commitment to transparency and asset protection.

The verification and control system, similar to how a SIM card guarantees personal identity in telecommunications, is ensured in USDC through detailed reserve audits and regular checks. This approach allows users to confidently work with the stablecoin, knowing their investments are protected and verified.