USDC Investors Withdraw $1,74 Billion Amid Stablecoin Crisis

According to Bloomberg, citing data from the Nansen analytical platform, on March 13, investors in USDC withdrew almost $1,74 billion. This is more than 2% of USDC working capital.

The outflow came after the stablecoin lost its peg to the US dollar last week. The reason for the shutdown was that the issuer of USDC Circle announced the placement of $ 3,3 billion - 8% of stablecoin reserves - in the bankrupt Silicon Valley Bank (SVB).

“We haven’t seen such a drop in stablecoin supply since the BUSD crash last month,” said Andrew Thurman, director of content at Nansen.

Recall that in early February, the New York State Department of Financial Services (NYDFS) demanded that Paxos Trust stop issuing BUSD due to security breaches. A day after the announcement, the outflow of funds from Binance amounted to $916 million.

Institutional investor wealth in USDC is at its lowest level in months, Nansen said. This is a sign that investors are either paying them back or simply staying away.

“Institutional investors still own a huge amount of USDC, but it looks like those who got rid of them are hesitant to return,” Thurman said.

Earlier, Circle CEO Jeremy Aller said the company would transfer all remaining deposits from SVB accounts to BNY Mellon accounts. In addition, Circle called on the US Congress to expedite the development of rules for stable cryptocurrencies.