Circle redeemed roughly $11.7 billion of its USDC stablecoin in the week ending October 29, with redemptions outpacing new issuance for a second straight week and cutting the token's circulating supply by $800 million to $70 billion.

During the same stretch, Circle issued about $10.9 billion in new USDC. More dollars went out through redemptions than came in through minting, and the gap was enough to trim $800 million from total circulation. Issuance remained substantial in absolute terms, but it fell short of the redemption volume.

The latest decline follows a drop of about $500 million in the week ending October 22, bringing cumulative net outflows over the two-week span to roughly $1.3 billion. Two consecutive weeks of net outflows make this more than a one-off.

USDC is a US dollar-pegged stablecoin issued by Circle and one of the largest stablecoins by circulation. Its supply expands when new tokens are minted against dollar deposits and contracts when holders redeem tokens for cash, so the weekly balance between issuance and redemptions moves total circulation directly.

Reserves Remain Above Circulating Supply

Circle's reserves stood at roughly $71.4 billion as of October 29, exceeding the $70 billion of USDC in circulation. The surplus means each token remains fully backed. The reserves break down into three main buckets:

• $32.9 billion in overnight reverse Treasury repurchase agreements
• $27.5 billion in US Treasuries maturing in less than three months
• $10.4 billion in deposits at major institutions, including systemically important banks

The $71.4 billion reserve total provided a cushion of roughly $1.4 billion over the amount of USDC outstanding. USDC reserves have consistently run above circulating supply, keeping the token's 1:1 backing with cash equivalents intact, and the $11.7 billion in weekly redemptions was handled without any sign of strain on that backing.

Why Circle's Income Statement Cares

For Circle as a company, revenue depends heavily on the interest earned on those reserves. The more tokens in circulation, the more dollars can be parked in Treasuries and repurchase agreements; fewer tokens outstanding means less interest coming in.

That link between supply and earnings has drawn closer scrutiny lately. Circle's share price targets have been cut, with downgrades tied to concerns that stablecoin demand could move toward alternatives that offer higher yields.

Holder behavior also appears to be changing. The research points to rising caution among market participants. It also flags the possibility that AI-driven investment decisions are influencing where holders keep their money.

What to Watch From Here

Two weeks of outflows totaling about $1.3 billion are not a collapse. Measured against a $70 billion base, that works out to a decline of roughly 1.9 percent — modest in proportional terms. Still, Circle's earnings are sensitive to the size of the float, so even moderate shrinkage gets attention from shareholders.

The next few weekly reports will show whether the current pattern holds. Three metrics carry the most weight:

• Net supply change: whether the streak of weekly declines continues, flattens, or reverses
• Gross issuance vs. redemption: a recovery in gross issuance relative to redemptions would show genuine demand coming back, rather than simply a slowdown in outflows
• Reserve composition: how Circle splits its holdings between overnight reverse repos, short-dated Treasuries, and bank deposits as supply moves

For the week in review: roughly $11.7 billion went out the door, reserves still sit above circulating supply, and the backing held at 1:1.

This article is based on reporting by CryptoBriefing, edited by Kaye Quema.