Stablecoin USDC saw its circulating supply dip by over 2% over the July 4 weekend.
On June 30, the stablecoin had a circulating supply of $27.9 billion. This amount has dropped to $27.3 billion in less than 48 hours, information on CoinGecko shows.
In fact, the total supply of USDC has been in decline since the start of the year, decreasing by over 38% since Jan. 1.
USDC is one of the most commonly used stablecoins in the decentralized finance ecosystem, following Tether’s USDT. It is currently deployed natively on 63 different chains with the majority of its supply circulating on Ethereum.
Like many other stablecoins, USDC itself is overcollateralized, meaning that it is backed by more assets than necessary to maintain its dollar value.
The stablecoin briefly depegged from the dollar in March this year, following the collapse of a slew of crypto banks.
To protect itself from looming liquidity concerns around US Treasury bonds, USDC’s issuer Circle has since made a decision to turn to short-term maturity bonds.
The latest attestation report by Deloitte, dated back to May of this year, shows that US treasury securities currently make up $11 billion of USDC’s total backing collateral held in Circle’s reserve fund.
A remaining $13.1 billion in US Treasury repurchase agreements and a little over $2 billion in cash are also held in the company’s reserve fund. An additional $2 billion in assets are held in regulated financial institutions.