Circle's USDC Circulation Drops 800 Million in Seven Days

Circulation Falls 800 Million in Seven Days

Redemptions overtook fresh issuance across Circle's USDC for a second consecutive week, shrinking the circulating supply of the dollar stablecoin by about 800 million tokens in the seven days through Oct. 29. Circle's own transparency disclosures put issuance at roughly 10.9 billion USDC over the window and redemptions at about 11.7 billion, so the burn side outweighed new supply by the 800 million margin even as gross flows ran heavy in both directions. Total circulation stood near 70 billion tokens as of Oct. 29, and the USDC price held its dollar peg through the contraction without any material deviation. Issuance is the volume of new tokens created when users and institutions deposit dollars with the issuer; redemption is the reverse, when holders burn coins to recover the underlying funds. Net float therefore tracks the balance between the two, and in this window redemptions won. A week in which issuance leads builds the supply; a week in which redemption leads drains it, and both sides of this ledger moved in nine-figure sums. The decline repeats the pattern of the seven days through Oct. 8, when supply also fell by about 800 million, leaving two straight weekly contractions of near-identical size. Dollar-pegged tokens settle most crypto trading, and their combined float is widely read as a gauge of dollar demand inside the market, which is why our USDC desk tracks these weekly figures as they land. Circle does not disclose the identity of redeeming holders or a stated cause with the flow data; the series records the net effect and nothing more.

Reserves at $71.4 Billion Back the Float

The backing behind the tokens stayed larger than the float. The transparency report dated Oct. 29 lists total reserves of about $71.4 billion against roughly 70 billion tokens in circulation, a cushion of about $1.4 billion. The portfolio is concentrated in short-dated dollar instruments. The largest line is $32.9 billion in overnight reverse repurchase agreements on US Treasuries, followed by $27.5 billion in T-bills maturing in under three months. Reverse repo is an overnight loan to the financial system secured by government paper, which converts back to cash each business day. Deposits at systemically important financial institutions account for $10.4 billion, and other bank deposits for $0.6 billion, which places effectively the whole reserve base in instruments redeemable within days. A shortfall would show up in this table first; none does, because reserves at $71.4 billion exceed every outstanding token with room to spare.

That composition is what makes a redemption-heavy fortnight survivable without stress. Because the book holds overnight repo and short bills rather than longer bonds, Circle can return cash to redeeming holders without selling assets into a falling market, and the peg did not waver across either weekly decline. The token's utility side matters here as well: USDC sits as a quote and collateral asset across DeFi markets and in liquidity pools, where usable depth depends on the float staying in place. On the operational calendar, our earlier coverage tracked the December 1 pause Circle set for the legacy CCTP v1 bridge, while a separate report recorded 30% growth in USDC custody on Kraken, both of which shape where the token can move even as the total float contracts.

Two Weeks, $1.6 Billion Out

Read together, the two data points point to a demand shift, not a backing problem. Two weekly contractions of about 800 million each removed roughly $1.6 billion of float, yet reserves of $71.4 billion still cover every outstanding token. Bitcoin (BTC) spot trades near $77,400 at the time of writing, and a soft patch in broader risk appetite is the usual companion when Bitcoin and stablecoin float contract together. Demand-side questions reach further out as well: one Wall Street house argued that AI assistants could erode USDC demand and cut its Circle (CRCL) target to $43 on that view. The figures bound themselves to Circle's own reporting window and say nothing about other issuers; the weekly transparency series remains available as the next check on whether redemptions keep outpacing issuance.