Since its introduction in 2018, the USDC stablecoin has been used to settle over $12 trillion in blockchain transactions, the company has said.

Crypto issuer Circle saw a surge in remittances flow through Asia via its USDC stablecoin, the company said in a new report highlighting how the cryptocurrency is used beyond speculative trading.

USDC is a cryptocurrency pegged to the value of the U.S. dollar, and backed by liquid cash and cash-equivalent assets.

In 2022, $130 billion worth of USDC flowed into Asia, the report says. According to Circle, the Asia-Pacific region accounts for 29% of all global digital currency value received compared to 19% for North America, and 22% for Western Europe.

These volumes are also made up of remittance transfers, a big deal for emerging markets with a large diaspora, such as the Philippines. In the report, Circle highlighted how it has partnered with Coins.ph – an exchange based in the country – to try and capture some of this business, worth around $36 billion a year.

In the report, Circle also claims that USDC is helping close the region’s $510 billion trade finance gap, which is the lack of liquidity available to companies for cross-border remittances and credit. This particularly serves in emerging markets with capital outflow restrictions, where businesses often struggle to obtain the necessary funding for international trade.

One company that’s using USDC to bridge this gap is Taipei-based XREX. In a CoinDesk profile from 2022, its founder, Wayne Huang, explained how XREX builds financial pipes between countries using stablecoins, taking advantage of the deep dollar liquidity in Taiwan and the dollar shortfall in other Southeast Asian nations.

Circle also said stablecoins’ use in speculative trading has declined 90% over the past five years.

Elsewhere in the world, the report said that 33% of consumers in Latin America have paid with a stablecoin, and citizens in the region have received $562 billion in digital currency between 2021 and mid-2022.

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Data from Nansen shows that the total amount held by smart money wallets, and active addresses, are at multi-month lows.

Crypto’s smart money – which Nansen defines as everything from institutions to large traders – is dropping Circle’s USDC, on-chain data shows.

According to data from Nansen, the total balance of USDC in smart money wallets is approximately $485 million across 1,396 wallets. This is down from $700 million in 1,455 wallets a month ago and $1.02 billion in 1,478 wallets a year ago.

Meanwhile, the percentage of smart money in all stablecoins has dropped to 21%. At the start of the year, it was near 30%, and hit an all-time high of 38% at the end of August 2022.

This skepticism of USDC by crypto’s biggest holders is likely impairing the ability for USDC to regain its peg.

Nansen reports that the supply of USDC on exchanges is up 8% compared to a week ago.

CoinGecko data says that USDC is currently trading at 98 cents. Across all exchanges, Kraken is the closest to regaining its peg, with the USDC-USD price coming in at 99.22 cents.

On Binance, USDC-USDT perpetual futures contracts, are trading at 98.72 cents, slightly ahead of the spot price of 98 cents, implying that some traders are optimistic the peg will be restored.

The post Smart Money Staying Put as USDC Remains Off-Peg appeared first on Crypto Insider.

Stablecoin issuer Circle held an undisclosed amount of USDC’s cash reserves at now-failed Silicon Valley Bank.

Circle Internet Financial’s USDC stablecoin saw some $1 billion in net redemptions since Friday morning when Silicon Valley Bank (SVB), one of Circle’s banking partners, was shut down by regulators, blockchain transactions from crypto intelligence platform Nansen show.

According to Nansen, Circle burned some $1.6 billion of USDC on Friday, taking out the tokens from circulation as investors redeemed dollars. Circle also minted new coins, adding to the circulation, but much less than it destroyed.

Subsequently, USDC’s market capitalization fell to $42.4 billion from $43.5 billion on Friday, according to data from CoinMarketCap. USDC also depegged from $1, a sign of worry about the state of its reserves.

USDC is the second-largest stablecoin, trailing only Tether’s USDT, and a backbone of the crypto ecosystem. The token’s value is backed by U.S. government bonds and cash-like assets, including a total $11.1 billion of cash deposits at various regulated banks, according to Circle’s website.

Investors grew concerned with the stablecoin’s stability after SVB, one of the banks where Circle held a part of USDC’s backing assets, suffered a bank run. Regulators shut down the bank’s operations on Friday morning.

A Circle spokesperson told CoinDesk Friday afternoon that SVB was one of six banks who managed “the approximately 25% portion of USDC reserves held in cash.”

“While we await clarity on how the FDIC receivership of Silicon Valley Bank will impact its depositors, Circle and USDC continue to operate normally,” the spokesperson added.

The post Circle’s USDC Endured $1B of Net Redemptions Since Silicon Valley Bank’s Shutdown appeared first on Crypto Insider.

Fund was created in response to a rapid drop and then rebound of the HT Token.

Huobi now has a $100 million liquidity fund to protect against precipitous drops of the HT token, in response to what happened late Thursday U.S. time.

Sun confirmed a transfer of $100 million in USDC to Huobi just after 04:25 UTC, or 11:27 AM Hong Kong time.

The rapid drop and then rebound was caused by “leveraged liquidation on the market caused by a few users,” according to a tweet by Sun. This comes amid a broader crypto market correction as $307 million in positions across the market were liquidated as traders digest the impact of Silvergate’s exit from banking crypto companies.

“We will continue to improve the liquidity depth of main cryptocurrencies and HT token, strengthen leverage risk warnings and liquidity capabilities,” Sun tweeted.

Sun has previously disclosed that he’s a major holder of HT.

HT dropped from a 24-hour-high of $4.81 to a low of $0.31 at 21:00 UTC on Huobi’s exchange, according to data from TradingView.

In October, HT rallied nearly 75% as Sun said “revitalizing Huobi is to empower HT” and promised “there will be many big moves around HT, including brand upgrade, heavy empowerment, and business cooperation.”

HT is currently trading at $3.90, according to CoinGecko.
Earlier, a tweet from Nansen.ai had flagged that Sun was moving $60 million in USDT, though the ultimate destination of that was Aave, and this was unrelated to the Huobi liquidity fund.

The post Justin Sun Completes $100 Million USDC Transfer to Create Huobi Liquidity Fund appeared first on Crypto Insider.

Flux Finance invests in Ondo’s Short-Term U.S. Government Bond Fund (OUSG) a tokenized version of a Blackrock Treasury Bond ETF.

What’s the latest trend in Decentralized Finance? Yield farming backed by U.S. government debt.

Following the recent launch of Ondo Finance’s U.S. Treasury-backed Government Bond Fund (OUSG), Flux Finance has launched a decentralized lending protocol that allows users to deposit USDC or DAI into Flux’s protocol, which is backed by OUSG, and, in turn, receive fUSDC or fDAI, two derivative tokens representing the USDC and DAI on Flux.

Flux is a fork of the popular lending and borrowing protocol Compound, which holds billions of dollars in locked tokens as of Thursday.

Decentralized finance (DeFi) protocols like Flux rely on smart contracts instead of middlemen to provide financial services, such as lending and borrowing, to users. On the other hand, yield farming refers to users getting rewarded with a project’s tokens for providing liquidity to that project.

The fUSDC and fDAI tokens can be in turn used as collateral at lending and derivatives protocols. All this is similar to how liquid staking protocols like Lido issue tokens such as stETH, which represent ether staked on their platforms at a 1:1 ratio, and can be used for yield farming.

The interest in yield from tokenized U.S. government debt comes as lending rates for major DeFi platforms struggle after 2022’s chaotic crypto market, and the Fed continues to raise interest rates.

According to DeFi Prime, the average rate for USDC lending is 1.68%, while a number of smaller TradFi neobanks will pay up to 4% for deposits with CapitalOne paying 3.4% and Discover at 3.3%.

And those TradFi banks have FDIC insurance.

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Coinbase highlights questions about Tether reserves in campaign to get users over to USDC

Coinbase is waiving the conversion fees for users that wish to switch to a “trusted stablecoin” in a new campaign that highlights the quality of reserves that back Circle-owned USD Coin (USDC).

“The events of the past few weeks have put some stablecoins to the test and we’ve seen a flight to safety,” Coinbase said in blog post published Friday morning Asia time. “We believe that USD Coin (USDC) is a trusted and reputable stablecoin.”

Coinbase said starting today it’s waiving fees for global retail customers to convert USDT to USDC.

Coinbase is a co-founder of USDC.
On-chain data shows that USDT is the third-most widely traded digital asset on Coinbase, representing 5% of the volume on the exchange, where it currently trades for 99 cents.

Days after the FTX collapse, Tether (USDT) was knocked off its peg and traded as low as 93 cents. The majority of trading pairs on exchanges have returned to $1, though CoinGecko data shows that it continues to trade at 99 cents on some pairs at Binance.

In late September, Tether was ordered by a U.S. judge in New York to produce financial records relating to the backing of USDT. This is separate from the lawsuit before the New York Supreme Court that’s asking for the New York Attorney General to release documents it gathered in its investigation into Tether’s reserves.

Recently Binance has stopped supporting USDC, auto-converting customer holdings into its own stablecoin BUSD.

The post Crypto Exchange Coinbase Asks Users to Switch USDT for USDC appeared first on Crypto Insider.

The stablecoin is trading as low as $0.89 against USDC on Curve Finance.

The HUSD stablecoin, which is issued by Stable Universal, has fallen to $0.92, an 8% drop from its planned $1 peg, according to CoinMarketCap prices.

It is trading as low as $0.89 against the USDC stablecoin on decentralized finance (DeFi) protocol Curve Finance. The so-called depeg occurred 16 days after crypto exchange FTX removed HUSD from its basket of support USD stablecoins.

A stablecoin is a cryptocurrency designed to hold its value against another asset. This can be in the form of algorithmic stablecoins or reserve-backed coins, of which HUSD is an example. The stablecoin sector has been under intense regulatory scrutiny this year following the implosion of algorithmic stablecoin TerraUSD (UST), which saw $18.71 billion evaporate alongside the collapse of Terra’s LUNA token.

A year ago, HUSD published a breakdown of reserves that showed every issued token was backed by U.S. dollars held in cash in money market accounts. At press time HUSD has a market cap of $149.5 million.

HUSD is issued by Stable Universal and can be redeemed on a 1:1 basis against the U.S. dollar, according to the company’s website.

Typically, when redemptions are live the price will gravitate toward the peg because if it’s lower, traders can purchase tokens at a discount on an exchange and redeem for a full dollar through the company’s website.

Stable Universal did not immediately respond to CoinDesk’s request for comment.

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