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USD Coin (USDC)

USD Coin (USDC) is a stablecoin from Circle. This token aims to maintain a value of about one U.S. dollar.

Last updated • 2 min read
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What is USD Coin (USDC)?

USDC isn’t a coin with its own blockchain. It’s a token on existing blockchains, digital networks where transactions are processed.

Circle holds reserves, including cash and short-term U.S. Treasury securities. The company uses these reserves to help keep USDC pegged to the dollar. Eligible customers can redeem USDC directly with Circle for dollars. Many individual users buy or sell USDC through a crypto exchange or another intermediary.

An example of USD Coin (USDC)

Suppose someone sends 50 USDC to another person’s crypto wallet on the same supported network. At its intended peg, those tokens represent about 50 U.S. dollars.

Any network fees for the transfer and fees charged by an intermediary are extra. This example shows that USDC can be sent without first moving the money back to a bank account.

Why is USD Coin (USDC) important in crypto?

USDC is used for payments, money transfers, and trading in the crypto market. In DeFi, applications for financial services without a traditional intermediary, USDC can also be used to borrow, lend, or provide liquidity.

In the news, you may see USDC mentioned in reports about stablecoin reserves, payment applications, or a departure from its dollar peg. A price around one dollar doesn’t mean USDC is risk-free. The peg depends on Circle, its reserves, intermediaries, and the ability to redeem tokens.

USDC is pegged to the U.S. dollar, not the euro. That means its value in euros can change when the exchange rate between the euro and dollar changes. Circle can also block USDC at certain addresses. In addition, USDC transferred through a bridge may carry extra risk.

Disclaimer: This content is for informational purposes only and does not constitute financial, investment, legal, or tax advice. The information provided may be incomplete, inaccurate, or outdated and should not be relied upon as such. Nothing on this website should be considered a recommendation to buy, sell, or hold any cryptocurrency. Investing in crypto-assets involves risk of loss.