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Some platforms and integrations may choose to burn their stablecoin directly onchain by design, outside the standard conversion and redemption flow. Verified Redemptions catches those burns, releases the matching USDC from reserves, and keeps your stablecoin backed 1:1 automatically.

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Why it exists

Each custom stablecoin is backed 1:1 by USDC in Coinbase reserves. Burning tokens onchain removes them from circulation, which frees up the USDC that was backing them. Until that USDC is released, reserves hold more than the supply requires. Verified Redemptions releases it automatically and keeps reserves matched to supply, without the manual work each burn would otherwise take.

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How it works

  1. Detect: Coinbase monitors onchain activity for burns of your custom stablecoin.
  2. Verify: only burns from a pre-approved, partner-controlled source are eligible. Coinbase’s own burns are excluded to avoid double-counting.
  3. Release: the matching USDC is unlocked from the reserve pool.
  4. Deliver: the USDC is returned to your Coinbase account, the same one associated with your custom stablecoin.
  5. Record: the burn and matching USDC release are recorded so reserves stay matched to circulating supply.

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Security and controls

The approved burn source and the destination account are set by Coinbase during onboarding and cannot be changed at runtime. Burn amounts are fixed onchain, so released USDC always matches the amount burned, and burns from any other source never trigger a redemption.

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Availability

Verified Redemptions are supported on Solana, where any holder can burn the SPL tokens they own directly onchain. This makes onchain burns a common way to remove supply. To enable it for your custom stablecoin, reach out to your Coinbase contact.