Cryptocurrency exchange Gemini burnt about one-fifth of its Gemini Dollar (GUSD) stablecoin total supply on Dec. 3.
Whale Alert — a Twitter account dedicated to tracking large cryptocurrency transactions — reported on Dec. 3 that 1,035,020 GUSD were burnt in a single operation. This number of tokens is equivalent to around 20% of what was the total GUSD circulating supply before the burn. The remaining GUSD supply is a little more than 4.1 million GUSD.
Gemini Dollar market cap one-day chart. Source: CoinMarketCap
Gemini Dollar’s rise and demise
The Gemini dollar has seen an overall poor performance since its launch in late September last year. The token received approval from the New York Department of Financial Services and the United States dollars that back it are “held at a bank located in the United States and eligible for FDIC ‘pass-through’ deposit insurance, subject to applicable limitations.”
But clearing regulatory hurdles is seemingly not enough to assure the success of a stablecoin. CoinMarketCap historical data shows that GUSD reported $3.3 million in trading volume on Dec.3, down from a peak of over $249.4 million reported on Feb. 20, 2019. The data suggests that initial enthusiasm around the asset has cooled down.
The burn of a notable portion of the token’s total supply has not gone unnoticed by the community, with Frank Chaparro, news director of industry news outlet The Block, commenting on Twitter, “GUSD is one of the biggest crypto failures of 2019.”
Stablecoins are causing concern among financial regulators worldwide. As Cointelegraph reported earlier today, Bank of Japan Governor Haruhiko Kuroda recently said that no global stablecoin should begin its operations until legal, regulatory and oversight challenges and risks are addressed.