World Liberty Financial stablecoin supply shrinks as USD1 market cap drops

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USD1 stablecoin market cap drops

Highlights

USD1 market capitalization falls to $4.02 billion on Oct. 15 from $4.43 billion on Oct. 6 amid concentrated redemptions on Ethereum and BNB Chain.
On Ethereum, net USD1 redemptions reach $184.60 million, with BitGo handling over 99% of token burns, while BNB Chain records $200.43 million from mostly one unidentified address.
USD1 maintains its dollar peg, trading between $0.998–$1.000, as its 11.45% supply drop outpaces USDe, USDC, and USDT declines ahead of a planned issuer transition.

Redemptions concentrate on Ethereum and BNB Chain

As reported by Cointelegraph, citing Onchain Benchmark, USD1’s circulating supply declines through concentrated redemptions on Ethereum and BNB Chain between Oct. 6 and Oct. 15, with CoinGecko data showing market capitalization at about $4.02 billion on Monday, down from $4.43 billion on Oct. 6.

World Liberty Financial’s proof-of-reserves dashboard separately shows about $4.01 billion in reserves. Onchain Benchmark says Ethereum accounts for $184.60 million in net USD1 redemptions across 63 token burns during the period, while BNB Chain records $200.43 million across 12 burns.

On Ethereum, more than 99% of tokens sent for redemption pass through a wallet labeled BitGo, USD1’s current issuer and custodian. On BNB Chain, the researchers say nearly $200 million in redemptions originate from a single unidentified address, although they say they cannot establish who controls the funds or why the tokens are redeemed.

Stablecoin peg holds as issuer transition draws focus

Despite the supply decline, USD1 maintains its dollar peg throughout the period examined by Onchain Benchmark, trading between $0.998 and $1.000. The researchers say they find no evidence of a sustained depegging event, indicating the contraction in circulating supply does not coincide with a significant loss of dollar value.

The reductions are not offset by fresh issuance on Solana, where USD1 supply remains unchanged at about $1.42 billion during the nine days reviewed. Transfers between Ethereum and BNB Chain total less than $1 million, the report says, suggesting the missing supply is not simply moving between the two networks.

Onchain Benchmark says the next test for USD1 comes with the planned change of issuer, when World Liberty’s trust company opens. The firm also says USD1’s supply contraction on Ethereum is steeper than several other dollar-denominated stablecoins over the same Oct. 6 to Oct. 15 period, with USD1 down 11.45%, compared with declines of 4.93% for USDe, 2.18% for USDC and 0.76% for circulating USDT.

Our earlier article reviewed how geopolitical tensions and elevated fiscal spending are testing sovereign resilience in a higher interest rate environment, increasing refinancing strain as governments roll over debt at higher costs. It also noted that emerging and frontier markets are especially exposed because interest-service burdens are high relative to limited revenue bases, while conflict-driven energy and food price shocks can keep inflation elevated and pressure credit outlooks.

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