USDC is a stablecoin that maintains a 1:1 peg to the U.S. dollar. Each unit of this cryptocurrency in circulation is supported by $1 held in reserve, consisting of a combination of cash and short-term U.S. Treasury bonds. The Centre consortium, responsible for this asset, states that USDC is issued by regulated financial institutions. The stablecoin initially launched on a limited scale in September 2018. In essence, USDC’s guiding principle is “digital money for the digital age,” designed for a world where cashless transactions are increasingly prevalent. Various use cases for USDC have been disclosed. In addition to offering a secure option for crypto traders during volatile periods, the proponents of the stablecoin suggest it enables businesses to accept payments in digital assets and has the potential to transform sectors such as decentralized finance and gaming. The overarching aim is to cultivate an ecosystem where USDC is widely accepted by numerous wallets, exchanges, service providers, and dApps.

The Centre Consortium comprises two founding members: Circle, a company specializing in peer-to-peer payment services, and the cryptocurrency exchange Coinbase. Other cryptocurrency ventures are welcome to join this consortium. Explaining the concept behind USDC, Circle co-founders Jeremy Allaire and Sean Neville stated: "We believe that an open internet of value exchange can profoundly transform and integrate the world, eventually eliminating artificial economic borders and enabling a more efficient and inclusive global marketplace that connects every person on the planet." In 2020, Circle and Coinbase jointly announced a significant upgrade to USDC's protocol and smart contract. The purpose of these enhancements is to facilitate the use of USDC for everyday payments, commerce, and peer-to-peer transactions.

The stablecoin market has become exceedingly crowded in recent years; however, USDC has aimed to stand out from competitors in several distinct ways. One key factor concerns transparency—providing users with the assurance that they can withdraw 1 USDC and receive $1 in return without any complications. To achieve this, a major accounting firm is responsible for verifying the levels of cash held in reserve and ensuring they align with the number of tokens in circulation. Unlike some crypto ventures, Circle and Coinbase have also achieved regulatory compliance, facilitating international expansion. Both projects are well-funded, providing stability and certainty for the stablecoin. Coinbase briefly considered diversifying the funds backing USDC but retracted that proposal following significant community backlash. The transparency regarding the origin of its funds has been a central reason for USDC's success. Unlike its rival USDT, which has been subject to repeated investigations, USDC has never faced accusations of wrongdoing. This has led to USDC capturing much of USDT's market dominance. Although USDT had a 74%:16% lead in market share in February 2021, this has reduced to a 45%:30% lead by February 2022.

In light of the collapse of TerraUSD, stablecoin issuers have faced significant scrutiny regarding the quality of the reserves backing their tokens. As part of a transparency initiative, Circle Internet Financial LLC (Circle), the issuer of the USDC stablecoin, released its reserves report as of July 31, 2022. The report indicates that the total USDC reserves held by the company consist of $42.3 billion in US Treasury Securities and cash deposits totaling $12.2 billion. This reserve report was compiled with the assistance of the prominent global accounting firm Grant Thornton. The accounting firm subsequently released an independent attestation dated August 24, 2022. The attestation states: “In our opinion, the Reserve Information in the accompanying USDC Reserve Report as of July 31, 2022 is fairly stated, based on the criteria set forth in the USDC Reserve Report, in all material respects.”

It is somewhat challenging to provide an exact figure, as theoretically, the number of USDC that can exist is unlimited. New coins are minted in accordance with demand whenever someone wishes to exchange their dollar for USDC. Despite this, several factors have contributed to the significant rise in USDC's popularity over the years, particularly in 2020. One key factor is the rapid surge in the popularity of decentralized finance (DeFi). USDC is frequently utilized across numerous DeFi protocols, serving as a gateway to the broader ecosystem.

All USDC tokens in circulation are ERC-20 tokens, residing on the Ethereum blockchain. A significant advantage of this setup is the seamless integration with Ethereum-based applications. As stated previously, the security and trust in this stablecoin are ensured by demonstrating that U.S. dollars are securely held in reserve.

As anticipated, Coinbase is one of the most enthusiastic exchanges offering USDC, largely due to its involvement in the creation of this stablecoin. Additionally, USDC is available for purchase and trading on exchanges such as Poloniex, Binance, OKEx, and Bitfinex, as well as on decentralized exchanges like Uniswap. USDC is frequently purchased with Bitcoin. If you are buying Bitcoin for the first time, be sure to consult our comprehensive guide here.

In a space that often seems loosely regulated, USDC has consistently set itself apart from other stablecoin projects by establishing connections with traditional financial institutions. After a $400 million funding round with participation from BlackRock, Fidelity, Fin Capital, and Marshall Wace LLP, BlackRock announced that it had "entered into a broader strategic partnership with Circle, which includes exploring capital market applications for USDC." Beyond partnering with the world’s largest asset manager, the stablecoin provider has secured additional agreements with prominent names from the traditional finance sector. In March, it was reported that America’s oldest bank, BNY Mellon, would act as the primary custodian of the assets backing USDC stablecoins. Concurrently, a press release indicated that BlackRock will serve as a primary asset manager for USDC cash reserves.