What Is USDC?
Also known as: USD Coin, Circle USDC
In short
USDC (USD Coin) is a centralized stablecoin issued by Circle that aims to maintain a 1:1 peg to the U.S. dollar. It is backed by reserves such as cash and short-term U.S. government bonds and is used on many blockchains.
USDC launched in 2018 under the Centre consortium founded by Circle and Coinbase; its governance later passed entirely to Circle. Eligible institutional customers can mint USDC by depositing dollars with Circle, or redeem USDC to receive dollars. Circle discloses the composition of its reserves through regularly published attestation reports.
USDC is available on Ethereum, Solana, Base and many other networks. Circle's Cross-Chain Transfer Protocol (CCTP) lets USDC be moved by burning it on one network and re-minting it on another, without the need for bridge tokens. It is widely used in DeFi protocols as collateral, a trading pair and a means of payment. Circle has obtained the license required to issue stablecoins in the EU in compliance with the MiCA regulation.
In March 2023, after it was disclosed that part of Circle's reserves was held at the failed Silicon Valley Bank, USDC briefly fell noticeably below 1 dollar (a depeg); it recovered once access to the funds became clear. This event showed the importance of where reserves are held. In addition, Circle can freeze USDC at specific addresses in line with legal requests; this is a counterparty risk inherent to centralized stablecoins.
Last updated: · This content is for information purposes only and is not investment advice.