USDC is a digital dollar issued by Circle. It is a stablecoin designed to keep a steady value equal to one U.S. dollar. Each token is backed 1:1 by highly liquid reserves such as cash and short‑term U.S. Treasury instruments held at regulated financial institutions. Circle publishes regular attestation reports to support transparency and verify reserves.
You may be interested in CCTP#
The Cross‑Chain Transfer Protocol (CCTP) is a permissionless system that lets USDC move between blockchains without third‑party bridges. Tokens are burned on the source chain and minted on the destination chain. This model reduces bridge risk and improves interoperability for developers and platforms.
USDC and digital commerce#
USDC was built so people and businesses can use the U.S. dollar without a traditional bank. It brings blockchain speed to payments and settlement. A digital dollar can move globally, work 24/7, and settle at low cost.
- Open and programmable
- Globally accessible
- Available 24/7/365
- Low‑cost settlement
Before stablecoins, companies relied on wires and card networks. These are slow, costly, and hard to connect with blockchains. USDC turns money into a programmable asset that developers can use in smart contracts, payment tools, and lending platforms.
Introduction#
This guide explains what USDC (USD Coin) is, how it works, and how people use it. USDC is a fiat‑backed stablecoin pegged 1:1 to the U.S. dollar. It was launched in September 2018 by Circle with support from Coinbase through the Centre Consortium. Unlike volatile crypto assets such as Bitcoin, USDC is designed for price stability, trading, and everyday transactions in decentralized finance and Web3.
USDC runs on many blockchains including Ethereum, Solana, Base, Arbitrum, Optimism, Avalanche, Stellar, and Tron. It is supported by exchanges, wallets, and DeFi platforms. Circle states that USDC is backed by cash and short‑term U.S. Treasury assets held at regulated financial institutions.
History and origin#
USDC began as an ERC‑20 token on the Ethereum blockchain. The aim was to move dollars at internet speed while keeping compliance and transparency. Over time, issuance expanded to other blockchains to reduce fees and improve user experience.
In March 2023, uncertainties around bank exposure caused USDC to briefly fall below its peg. The price recovered after U.S. authorities secured deposits. This showed how stablecoins can react to market conditions and reserve risk.
In 2024, Circle became compliant with the EU MiCA framework. The issuer also reduced support for some networks such as Tron to improve risk management and compliance standards.
How USDC works#
USDC is not its own blockchain. It is a token that exists on multiple blockchains and follows each network’s token standard, such as ERC‑20 on Ethereum or SPL on Solana. USDC inherits the speed and security of the blockchains it runs on.
Circle, as the issuer, controls mint and burn functions. New tokens are minted when users deposit U.S. dollars. When USDC is redeemed, tokens are burned. Contracts also allow freezing addresses to meet compliance and legal requirements.
For cross‑chain movement, Circle uses the Cross‑Chain Transfer Protocol. USDC is burned on one chain and minted on another, reducing bridge risk and supporting interoperability.
Token model and reserves#
USDC has no fixed supply. Issuance depends on user demand. When dollars are deposited, USDC is minted. When dollars are withdrawn, tokens are burned. This keeps the peg close to one U.S. dollar.
Reserves consist of cash and short‑term U.S. Treasury assets. These reserves are reviewed by independent auditors such as Grant Thornton. Circle provides public reports to verify liabilities and backing assets.
Key market statistics (2026)#
Circulating supply: about 75 billion tokens.
Market capitalization: around 75 billion USD.
Daily transaction and trading volume: tens of billions of USD.
Stablecoins processed more than 18 trillion USD in on‑chain value in 2025, with USDC responsible for a large share.
USDC is supported on more than 15 major blockchains and integrated with hundreds of platforms.
Main use cases#
- Trading and hedging: Traders use USDC as a stable currency for exchange pairs and risk control.
- Payments and settlement: USDC enables fast cross‑border transfers without bank wires.
- DeFi liquidity: USDC is widely used in lending protocols and decentralized finance pools.
- Remittances and payroll: Companies pay globally using a digital dollar.
- Web3 commerce: Platforms price goods and services in USDC to avoid volatility.
How to use USDC in practice#
- Buy USDC on a cryptocurrency exchange or marketplace.
- Store USDC in a wallet that supports Ethereum, Solana, or other blockchains.
- Transfer USDC to another wallet or platform within minutes.
- Use USDC in DeFi to lend, stake, or provide liquidity and earn interest income.
- Exchange USDC back to fiat currency when needed.
Who uses USDC#
- Traders use USDC to avoid market volatility between positions.
- Businesses use USDC for cross‑border payments and settlement.
- Payment platforms integrate USDC as a digital currency option.
- Developers build smart contract apps using USDC as a stable asset.
- DeFi users lend and borrow USDC in decentralized finance protocols.
USDC for businesses#
- USDC enables companies to accept payments without card networks or bank delays.
- It supports international payroll and remittance with lower fees.
- APIs allow platforms to automate settlement and treasury management.
- USDC can be used as a stable unit of account for digital commerce.
Advantages#
- Stable peg to the U.S. dollar
- High liquidity and broad ecosystem
- Regular audits and transparency
- Compliance with financial regulations
- Native issuance across blockchains and CCTP support
Risks and limits#
- Issuer and bank risk: USDC depends on Circle and its banking partners.
- Regulatory risk: Rules and sanctions can affect addresses and usage.
- Blockchain risk: Outages or smart contract bugs can impact transfers.
- DeFi risk: Leverage, liquidation, and protocol failures may cause losses.
Users reduce risk by diversifying platforms, verifying contract addresses, and using secure wallets for holding large balances.
Market behavior#
USDC targets one dollar. Its performance is measured by liquidity and stability rather than price growth. Small price moves may appear during market volatility, but arbitrage and redemptions usually restore the peg quickly.
Future outlook#
USDC is expected to grow with clearer regulation, stronger cross‑chain tools, and wider adoption in payments. Partnerships with Visa and fintech platforms show interest in stablecoin settlement for real‑world commerce. Users should continue to monitor reserves, audits, and compliance policies.
Conclusion#
USDC is a digital dollar backed by real assets and issued by Circle. It works across many blockchains and supports trading, payments, and decentralized finance. While it depends on a central issuer and financial partners, USDC remains one of the most trusted stablecoins for on‑chain currency use.
