The total supply of stablecoin USD Coin (USDC) has dropped from $55.55 billion to $46.57 billion over the past 90 days, based oninformationof DeFiLlama
This means that Circle, the USDC issuer, has burned $9 billion worth of stablecoins during that time.
It is the highest volume of USDC burned by Circle in the last 90 days, including $1 billion that was removed from stablecoin supply on the Tron network in early October.
Circle burns USDC when users exchange their coins for fiat currency, usually USD. The exchanged tokens will be sent to the incineration address. to permanently remove those coins from the blockchain.
This surge in USDC burning coincides with a decline in returns offered by major DeFi platforms to stablecoin lenders, as data from LoanScan shows. The USDC loan interest rate for Compound and Aave has shrunk by more than 70% since the start of the year.
This reduction puts DeFi’s yields below what it offers in traditional financial markets. Especially when the US Federal Reserve (Fed) raised its capital funds rate from 2.50% to 3.25% last month.
But despite the decline in USDC supply, Tether (USDT) supply has increased during the same period, with USDT supply rising by more than $2 billion since the beginning of July. As a result, Tether’s stablecoin market share rose to 45.9% in three months.
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