USD Coin (USDC)

USD Coin (USDC) is a stablecoin designed to be worth one US dollar. It is issued by US-based Circle, and every USDC in circulation is backed by cash and short-term US government debt. Launched in September 2018, USDC is especially popular with institutions and DeFi applications thanks to its regular reserve reporting and focus on regulatory compliance.

How does USDC work?

When one of Circle’s business customers deposits dollars, Circle mints the same amount of USDC; when USDC is returned, the tokens are burned and dollars are paid out. This mint-and-redeem loop is what keeps the market price anchored near $1. Retail users usually buy and sell USDC on exchanges or inside apps rather than dealing with Circle directly.

A large share of the reserves sits in the Circle Reserve Fund, a money market fund managed by BlackRock that exists solely to hold USDC reserves; the remainder is held as cash at banks. Circle publishes the reserve breakdown regularly, and the reports are checked by an independent accounting firm.

USDC vs USDT: what’s the difference?

Both target $1, but their reserves and regulatory standing differ. USDC’s reserves consist only of cash and short-dated Treasuries, while Tether also holds assets such as gold and bitcoin. In July 2024, Circle obtained an electronic money licence in France, making USDC one of the first major stablecoins compliant with the EU’s MiCA framework. USDT, on the other hand, has higher trading volume and more exchange pairs.

Native vs bridged USDC

Circle issues USDC natively on Ethereum, Solana, Base, Arbitrum, Avalanche and many other networks. On some chains, however, USDC exists as a bridged version, often labelled “USDC.e”, which Circle does not redeem directly; its value depends on the security of the bridge that created it. You can check which version you hold against Circle’s official list of contract addresses.

Circle’s Cross-Chain Transfer Protocol (CCTP) moves USDC between networks by burning it on one chain and minting it on another. That removes the need for funds to sit locked in a traditional bridge.

What is USDC used for?

• DeFi: it is a core asset in lending protocols, decentralised exchanges and liquidity pools.
• Payments: businesses and payment firms use it for dollar-denominated cross-border transfers.
• Parking funds: traders hold USDC to wait out volatile markets in dollar terms.

Alongside USDC, Circle also issues EURC, a stablecoin pegged to the euro. Large payment companies such as Visa have experimented with USDC in parts of their settlement process, a sign that stablecoins are becoming part of payment infrastructure beyond crypto exchanges.

Key milestones and risks

USDC was originally issued under the Centre consortium, set up by Circle and Coinbase; in 2023, governance passed fully to Circle. In March 2023, the collapse of Silicon Valley Bank put around $3.3 billion of reserves at risk and USDC traded well below $1 for several days, regaining its peg once US authorities guaranteed the bank’s deposits. The episode showed that even a stablecoin backed by safe assets can be exposed to banking risk. Circle went public on the New York Stock Exchange in June 2025.

Circle can freeze USDC at specific addresses in response to legal requests. Transfers sent on the wrong network may be unrecoverable, and USDC held on an exchange carries that platform’s custody risk.

How to read USDC market data

With a stablecoin, what matters is not price growth but how tightly it stays around $1. Market cap reflects the amount of USDC in circulation, and rising supply points to more dollar liquidity entering the crypto ecosystem. Against other currencies, USDC simply follows the US dollar exchange rate.

Official sources

• Circle: USDC reserves
• Circle: official USDC contract addresses
• Circle: CCTP documentation
• Circle: USDC terms