A report by Circle, the issuer of USDC, highlighted a 59% increase in wallets holding at least $10 worth of USDC in 2023, despite a $20 billion reduction in its circulating supply. The growth indicates continued user trust in the stablecoin amidst a declining market cap.
The report titled “The State of the USDC Economy” provided an overview of USDC’s current usage, noting a 44% decrease in circulating supply from $45 billion to $25 billion in the first 11 months of 2023. Regulatory pressures, bankruptcies, and fraud incidents in the crypto sector, coupled with rising interest rates, were cited as reasons for users moving assets out of the ecosystem.
Despite the contraction, the report suggested other factors pointing to USDC’s increasing acceptance. Over $197 billion of USDC was minted or burned throughout the year, cementing its role as a bridge between the crypto economy and traditional finance. Wallets with over $10 in USDC surpassed 2.7 million, a 59% increase from 2022.
2023 was a tumultuous year for USDC, which briefly lost value during a banking crisis in the US. However, the issue was resolved following the Federal Reserve’s intervention to reimburse depositors of failed banks.
Circle aims to expand its operations and increase market value, as evidenced by its IPO filing in the first two weeks of 2024 and a partnership with Yellow Card to promote USDC usage in Africa.