USDC (USD Coin) is a stablecoin pegged 1:1 to the US dollar. Each USDC token is backed by cash and short-term US Treasury bonds held in regulated financial institutions. It is issued by Circle, a licensed money transmitter, and has over $75 billion in circulation as of early 2026.

USDC is considered one of the safest stablecoins. Circle publishes monthly reserve attestation reports verified by Deloitte. Reserves are held in cash at major banks and in the BlackRock-managed Circle Reserve Fund. USDC is regulated as a stored-value product in the US and has achieved MiCA compliance in the EU.

What is the difference between USDC and regular dollars?

USDC is a digital representation of US dollars that lives on blockchains. Unlike bank dollars, USDC can be sent globally in seconds, traded 24/7, and used in decentralized finance applications. Each USDC is redeemable for $1.00 through Circle.

What blockchains support USDC?

USDC is natively issued on Ethereum, Base, Solana, Avalanche, Polygon, Arbitrum, Optimism, and several other blockchains. Base, an Ethereum Layer 2 built by Coinbase, has become one of the most popular chains for USDC due to its low transaction fees.

explainer6 min read

What is USDC? A Plain-Language Guide to USD Coin

USDC is a digital dollar backed 1:1 by real reserves. Learn how it keeps its peg, who issues it, where it works, and why millions of people use it for payments, savings, and trading.

published 2026-03-01

USDC (USD Coin) is a digital dollar. Each token is worth exactly $1.00, backed by real cash and short-term US Treasury bonds sitting in regulated financial institutions. You can send it to anyone with a crypto wallet, anywhere in the world, in under a minute. There are currently over $75 billion worth of USDC in circulation.

How USDC maintains its $1 peg

The mechanics are straightforward. Circle, the company behind USDC, holds reserves equal to the total supply of USDC tokens. When you buy 1,000 USDC, Circle puts $1,000 into reserve. When you redeem 1,000 USDC, they pull $1,000 out of reserve and burn the tokens.

Those reserves sit in two places: cash deposits at major US banks (including BNY Mellon) and the Circle Reserve Fund, a money market fund managed by BlackRock that holds short-dated US Treasuries. Circle publishes monthly attestation reports, independently verified by Deloitte, showing that reserves match or exceed the total USDC supply.

This is different from algorithmic stablecoins, which tried to maintain their peg through code alone. When Terra/UST collapsed in May 2022, wiping out $40 billion in value, it proved that algorithmic pegs break under pressure. USDC's model is simpler and more resilient: real dollars back real tokens.

Who issues USDC

Circle is a US-based fintech company founded in 2013. They hold money transmitter licenses in the states where they operate and are registered with FinCEN. In the EU, Circle became one of the first stablecoin issuers to achieve full MiCA (Markets in Crypto-Assets) compliance in 2024.

Coinbase, the publicly traded exchange, co-founded the Centre Consortium that originally governed USDC before Circle took over full management in 2023. Coinbase still earns revenue from USDC interest and serves as one of the primary distribution channels.

Where USDC lives

USDC is natively issued on multiple blockchains. The largest deployments are on Ethereum and Solana, but Base has become the fastest-growing chain for USDC activity. Base is an Ethereum Layer 2 built by Coinbase that offers transaction fees under $0.01 and confirmation times of a few seconds.

Other supported chains include Avalanche, Polygon, Arbitrum, Optimism, Stellar, and several more. Circle's Cross-Chain Transfer Protocol (CCTP) lets you move native USDC between chains without using bridges that wrap or lock tokens.

Why Base matters for USDC

Base has over $4.9 billion in total value locked and processes millions of transactions daily. The combination of Coinbase's distribution (100+ million verified users), low fees, and native USDC support makes Base the most accessible chain for everyday USDC use. If you're buying or selling USDC peer-to-peer through USDCtoFiat, all transactions settle on Base.

What people use USDC for

The use cases go beyond just holding a digital dollar. In 2025, stablecoin transactions hit a record $33 trillion in volume, with USDC accounting for $18.3 trillion of that.

Payments and remittances. Sending USDC across borders costs pennies and settles in seconds, compared to wire transfers that take days and charge $25-50 per transaction. Remittance costs with stablecoins run 0.5-3%, versus the 6-8% average for traditional services like Western Union.
Trading and DeFi. USDC is the base currency for thousands of trading pairs on both centralized and decentralized exchanges. Lending protocols like Aave and Compound let you earn yield on deposited USDC.
Off-ramping to fiat. Selling USDC for cash through platforms like USDCtoFiat or centralized exchanges gives you a direct path from crypto back to your bank account or payment app (Venmo, PayPal, Revolut, and others).
Dollar access in unstable economies. People in countries with high inflation or currency controls use USDC to save in dollars without needing a US bank account. Argentina, Turkey, and Nigeria are among the largest markets for stablecoin adoption.

USDC compared to other stablecoins

The stablecoin market has several major players. USDT (Tether) has the largest market cap at around $140 billion, but has faced ongoing questions about its reserve transparency. DAI (now USDS) is decentralized and governed by MakerDAO. PYUSD is PayPal's stablecoin, backed similarly to USDC but with smaller circulation.

USDC sits in a middle ground: more transparent than USDT, more widely supported than PYUSD, and backed by traditional assets rather than crypto collateral like DAI. For a detailed breakdown, see our USDC vs USDT comparison.

Risks to know about

USDC is not a bank deposit and is not FDIC insured. If Circle were to fail as a company, redemption could be delayed or complicated, though the reserves would still exist in regulated accounts. In March 2023, USDC briefly depegged to $0.87 when Silicon Valley Bank (which held $3.3 billion of Circle's reserves) collapsed. The peg recovered within 48 hours after the FDIC guaranteed all SVB deposits.

Smart contract risk also exists. While USDC's contracts have been audited extensively, no code is perfectly bug-free. And regulatory risk remains: governments could change the rules around stablecoin issuance, though the trend has been toward clearer frameworks (MiCA in Europe, proposed stablecoin legislation in the US) rather than outright bans.

Getting started with USDC

You can buy USDC on any major exchange (Coinbase, Kraken, Gemini) or through peer-to-peer platforms. If you want to skip the exchange account and buy directly with Venmo, PayPal, Revolut, or other payment apps, check out our Guide to buying USDC.

To track USDC activity across the ZKP2P peer-to-peer network, including live orderbook data, volume trends, and maker analytics, visit the peerlytics dashboard.