USDC, sometimes referred to as USD Coin in the past, is a USD stablecoin issued by CENTRE, a consortium created by Coinbase exchange and a fintech company called Circle. Its value is pegged to the US dollar by fiat currencies and commodities at a 1:1 ratio, which means that 1 USDC is equal to 1 USD.
USDC was first launched as a ERC-20 token in 2018, and has since expanded to other major platforms. 2021 was a big year for the stablecoin as Visa started to accept payments made with USDC.
While there are many USD stablecoins in the market, USDC stands out amongst the crowd because it is created by a regulated entity that is registered with the US government as a Money Service Business. Besides being regulated, reserves backing USDC are audited by Grant Thornton on a monthly basis, ensuring the value and liquidity of the cryptocurrency.
USDC is a fiat and commodity collateralized stablecoin, which means that for every USDC token issued, there is a dollar or a dollar value in dollar-denominated assets. To maintain the balance between the reserve and the amount of USDC, new USDC is minted every time you use fiat to buy USDC and the fiat is deposited into the reserve; likewise, when you sell USDC to get fiat, the fiat is transferred from the reserves to your bank account and the sold USDC is burned.
In September 22, 2023, Circle explained that USDC (pronounced U-S-D-C) is now the official name and symbol for Circle's dollar-backed stablecoin. The name “USD Coin” is being phased out. The existing token addresses remain the same; we will not be introducing a separate token.
According to the data by the parent company Circle, there are $44.31 billion in circulation as of January 2, 2025. And $44.44 billion is kept in USDC reserves. USDC is backed by the equivalent value of US dollar denominated assets held as reserves for the benefit of USDC holders. Cash is held at regulated financial institutions. The portfolio of the Circle Reserve Fund, which can contain short-dated US Treasuries, overnight US Treasury repurchase agreements, and cash, is custodied at The Bank of New York Mellon and is managed by BlackRock.
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