USDC usdc
USDC (USD Coin): USDC is a stablecoin designed to stay worth one US dollar. It is issued by Circle, a US company, and each token is meant to be backed by cash and short-term US government securities held in reserve. You can move USDC on several blockchains, and verified business customers can redeem it with Circle for dollars.
How USDC keeps its value
When an approved customer sends US dollars to Circle, Circle issues the same number of USDC tokens. When USDC is redeemed, the tokens are destroyed and dollars are paid out. Because large holders can always swap one USDC for one dollar with the issuer, traders who see the price drift away from a dollar have a reason to bring it back. Circle publishes regular reports from an independent accounting firm on the reserves.
Where USDC is used
USDC is used on crypto exchanges as a dollar balance for trading, in DeFi apps for lending and liquidity, and for sending dollars between countries without a bank transfer. It runs as a token on several blockchains, including Ethereum and Solana. The network you send it on matters: sending USDC on the wrong network can mean the funds do not arrive.
USDC vs USDT
USDC and USDT (Tether) are both US dollar stablecoins, but they are issued by different companies with different reserve policies, reporting and legal setups. USDC is issued by Circle in the United States. Comparing how each issuer reports its reserves helps you understand the risk you are taking on with each one.
Risks to understand
A stablecoin is only as strong as its reserves and its issuer. In March 2023, USDC briefly traded below one dollar after Circle disclosed that part of its reserves sat at Silicon Valley Bank, which had failed. It returned to its peg once those funds were confirmed safe. USDC is not a bank deposit, and Circle can freeze tokens at addresses linked to crime or court orders.
Frequently asked questions
Is USDC the same as a US dollar?
No. It is a token designed to track the US dollar and is backed by reserves, but it is not a bank deposit and carries issuer and reserve risk.
Who issues USDC?
Circle Internet Financial, a US company, issues USDC and manages the reserves behind it.
Can I buy USDC in Australia?
Yes. Many exchanges available in Australia, including Coinbase, list USDC, and you can buy it with Australian dollars.
Can USDC lose its peg?
It can for short periods, as in March 2023. The redemption process is designed to pull the price back toward one dollar.