What Is Circle’s USD Coin (USDC)?

Learn how USDC bridges TradFi and crypto with fast, stable transactions, global utility, and rising regulatory and institutional support.

Introduction to Circle’s USDC

Cryptocurrency’s volatility makes it difficult for many individuals, businesses, and financial institutions to take advantage of the benefits of decentralised finance (DeFi). 

USDC is a stablecoin designed to facilitate DeFi transactions while maintaining a consistent value, offering individuals and corporate entities a digital dollar alternative with fast transaction times, low fees, and seamless interactions, regardless of geographical boundaries.

What Is USDC: A Top, Regulated Digital Dollar

USD Coin (USDC) was launched by Circle in September 2018 as a tool to tokenise the US dollar. As a dollar-pegged, on-chain asset, USDC offers a relatively value-stable transaction option for a wide range of markets and situations where cryptocurrency would otherwise not be a viable option. 

Operating as an ERC-20 token on the Ethereum (ETH) blockchain, it avails immediate utility within the extensive Ethereum ecosystem. It has since branched out to additional networks, including Algorand (ALGO), Solana (SOL), Stellar (XLM), and Polygon (POL).

To date, Circle has clinched headlining corporate partnerships; the likes of Sony, Shopify, and Stripe all began accepting USDC payments in some capacity.

How Is USDC Backed?

Circle designed the stablecoin to consistently match the value of the US dollar. It accomplishes this by maintaining a reserve of US dollars and cash equivalents equal to or exceeding the number of circulating USDC tokens. 

Circle has committed to transparency and regulatory compliance in its operations, regularly publishing attestation reports conducted by independent auditing firms. Such firms verify its reserves and corresponding ability to facilitate redemption of USDC for US dollars, on a 1:1 basis.

Claiming the title of the world’s ‘most licensed stablecoin company‘, Circle maintains licensure in jurisdictions including the United States, the United Kingdom, the European Union, and Singapore. It also holds state-level licensure throughout the US to ensure compliance with ever-shifting financial regulations. 

How Does USD Coin (USDC) Work?

Each USDC token is effectively an on-chain representation of a US dollar held in Circle’s reserves, providing a gateway between traditional finance (TradFi) and digital assets. 

USDC’s Real-World Utility

USDC offers substantial utility to developers, traders, everyday consumers, and those looking to send or exchange funds internationally. Here are some common USDC use cases:

• Trading: USDC is commonly used as a trading pair on cryptocurrency exchanges, mitigating risk by serving as a holding option while volatile crypto prices stabilise. 

• E-Commerce and Online Payments: Online platforms and businesses that accept USDC as a form of payment allow crypto holders to directly purchase goods and services without converting digital assets to fiat currencies. International purchases benefit from streamlined transactions and low fees.

• DeFi Activities: Users can lend, borrow, earn interest, and provide liquidity using USDC in various DeFi protocols. This is especially useful in yield farming and lending, where value stability can be crucial.

• Smart Contract Operations: USDC integration into smart contracts allows developers to create programmable financial applications around USDC transactions, such as subscription models, automated payments, and conditional transfers.

• Stable Value Transfers: USDC’s relative stability makes it a convenient option for remittances and cross-border transactions of all kinds.

The Tokenomics of USDC

Circle’s reserves determine its maximum supply. New coins can be minted when funds are added, and tokens must be ‘burned’ when funds are removed, in order to preserve USDC’s 1:1 peg to the US dollar.

Although designed to maintain a consistent value of US$1.00, USDC has experienced temporary price swings. It reached an all-time high (ATH) of $1.10 in August 2018, and dipped below $0.87 following the collapse of Silicon Valley Bank in March 2023, quickly returning to $1.00 in both instances.

Rather than following typical cryptocurrency valuation trends, USDC tends to be affected by economic factors that affect the dollar. For instance, if the US Federal Reserve pursues inflationary policies, USDC’s purchasing power decreases despite holding its peg.

While most USDC tokens are minted directly on-chain by a regulated Circle affiliate, bridged USDC is minted on one chain after a corresponding burn on another. Bridged USDC is not issued or backed by Circle, making it a riskier asset than native USDC. Only native USDC is Circle-backed and guaranteed redeemable for dollars.

What Does the Future Hold for USDC?

Circle actively integrates with major vendors, traditional financial institutions, and DeFi platforms to establish USDC as the ‘go-to’ stablecoin pegged to the US dollar. 

Circle introduced its Circle Payments Network in April 2025 to challenge global payment processors like VISA and Mastercard. The network targets financial institutions and businesses and aims to facilitate cross-border payments through USDC instead of fiat currencies. 

Circle launched an initial public offering (IPO) in June 2025, raising $1.145 billion and sending the company’s stock soaring, with shares rising from $31 at IPO to $82 by the close of trading.

These moves demonstrate ambition well beyond simply being another dollar-pegged coin.

If successful, USDC could evolve from a trading pair and DeFi staple into a mainstream settlement asset, powering e-commerce checkouts, remittance flows, and enterprise treasury systems. Regulatory clarity, particularly under frameworks like the US GENIUS Act and Europe’s MiCA, will be critical. With Circle’s emphasis on transparency and compliance, USDC is well placed to benefit from these shifts, though it must still compete with the liquidity depth of USDT and the enterprise positioning of RLUSD.

Benefits and Limitations of USDC

How to Buy USDC on Crypto.com

Buying USDC and other stablecoins is straightforward with the Crypto.com App. Users can use supported fiat currencies like USD, EUR, and GBP. 

Below is a step-by-step guide to getting started:

1. Download the Crypto.com App, available on the Apple App Store and Google Play. 

2. Complete the sign-up process. On-screen prompts are at hand to guide users. 

3. Funds deposited using bank transfers will usually clear within one to three business days. For faster access, users can also fund their account using Apple Pay or a prepaid/credit card. Please note that processing times and availability may vary depending on card issuer and other factors. 

4. Once the funds are cleared, users can start buying USDC, along with large-cap assets like Bitcoin (BTC) and Ethereum (ETH), plus an extensive collection of altcoins and meme coins.

Conclusion

USDC has carved out a distinctive role as a transparent, regulated digital dollar, but it faces stiff competition from a fellow giant in USDT, and newer challengers such as RLUSD. 

In a market where liquidity and trust are everything, USDC’s continued relevance will depend on Circle’s ability to scale its payment network, secure deeper institutional adoption, and maintain its reputation for transparency. 

For investors and users, the lesson is that even the most stable coins are subject to shifting market forces, making it essential to weigh both benefits and risks before integrating USDC into portfolios or payment flows.

Due Diligence and Do Your Own Research

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Although the term ‘stablecoin’ is commonly used, there is no guarantee that the asset will maintain a stable value in relation to the value of the reference asset when traded on secondary markets or that the reserve of assets, if there is one, will be adequate to satisfy all redemptions.

Past performance is not a guarantee or predictor of future performance. The value of crypto assets can increase or decrease, and you could lose all or a substantial amount of your purchase price. When assessing a crypto asset, it’s essential for you to do your research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility.