What Is USDC (USD Coin)?

USDC, short for USD Coin, is a stablecoin pegged to the US dollar and issued by Circle. It is the second-largest stablecoin after USDT and is known for its focus on regulatory compliance and transparent reserves.

How USDC Works

Every USDC is backed by an equivalent amount of cash and short-term US Treasuries held at regulated financial institutions. Circle publishes regular attestations of these reserves, which is a big part of why USDC is seen as the more transparent dollar stablecoin. Users can mint and redeem USDC one-to-one for dollars through Circle, keeping the token tightly pegged.

USDC is not risk-free, though. In March 2023 it briefly lost its peg after Circle disclosed that part of its reserves sat at Silicon Valley Bank during the bank’s collapse, and the peg only recovered once those deposits were guaranteed. It was a reminder that even a fully reserved stablecoin inherits the risk of the banks holding its cash.

Where USDC Runs

USDC is issued natively on several networks, including Ethereum, Solana, Base, and Polygon. On Solana it exists as an SPL token. Circle supports moving USDC across chains through its Cross-Chain Transfer Protocol, and the token is deeply liquid on both centralized exchanges (CEXs) and decentralized exchanges (DEXs).

USDC vs USDT

USDC and USDT serve the same purpose but emphasize different things. USDT leads in raw liquidity and trading-pair coverage, while USDC differentiates on compliance, attested reserves, and closer ties to regulated institutions. For many builders and funds USDC is the default dollar token; for high-volume trading, USDT pairs are often deeper.

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