Stablecoin liquidity is contracting, and capital preferences are experiencing a phased shift.

Latest official data shows that in the past 7 days, approximately 5.1 billion USDC tokens were issued, but redemptions reached 5.8 billion tokens, resulting in a net circulation decrease of about 700 million tokens, with the total circulation dropping to approximately 78 billion tokens.
From the reserve structure perspective:

Total reserves are about $78.2 billion, maintaining an over-collateralized coverage.

Approximately $47.2 billion allocated to overnight repurchase agreements (high liquidity assets).

About $19.4 billion in short-term government bonds within 3 months.

Approximately $11 billion stored in systemically important banks.

About $600 million in other bank deposits.

The core signals behind this data are quite clear:
First, funds are flowing out of the stablecoin system, and short-term liquidity is tightening;
Second, the reserve structure remains highly conservative, mainly composed of high-liquidity and low-risk assets, emphasizing payment safety.

At the market level, this usually indicates two possibilities:
Either capital is flowing back into the fiat currency system, or it is reallocating into other risk assets.
The increase or decrease of stablecoins has never been an isolated event but a “frontline indicator” of the overall market capital flow.

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