USD1 stablecoin drops $400M, maintains peg amid redemptions

7.1 Stablecoins

Oct 19, 2026

USD1 lost over $400M in market cap in two weeks due to major redemptions, but maintained its dollar peg. The stablecoin sector also saw a $1.65B supply drop.

World Liberty Financial's USD1 stablecoin saw its market capitalization drop from $4.43 billion to about $4.02 billion—a 9.1% decrease—over two weeks, driven by significant redemptions on Ethereum and BNB Chain. Notably, a single unidentified address on BNB Chain accounted for nearly $200 million in redemptions, while Ethereum experienced $184.6 million in net redemptions across 63 token burns. Despite these large outflows, USD1 maintained its dollar peg, trading between $0.998 and $1.000. The decline was due to a reduction in circulating supply, not price volatility. Across the broader stablecoin sector, total supply shrank by $1.65 billion last week, reflecting shifting market dynamics and possibly lower retail trading activity, even as decentralized exchange volumes began to recover. USD1’s stability mechanisms functioned as intended, absorbing heavy redemptions without losing its peg.