You have probably heard that $USDC is backed 1:1 by the dollar and regularly audited. But what almost no one mentions is: it can also be frozen — literally or even erased from your wallet.
Circle, the issuer of USDC, has total control over the smart contract that governs the stablecoin. This means that, unlike Bitcoin, your $USDC can be locked or erased by the company's decision.
In the USDC code, there are administrative functions such as:
function blacklist(address user) – prevent an address from using USDC.
function freeze(address user) – blocks all USDC transactions from an address.
Yes, that's right: the company can block your funds if your address is placed on the “blacklist.”
✅And this is not a theoretical power — it has already been used. In 2020, Circle froze $100,000 from a user after a request from authorities, due to suspected involvement in fraudulent activities.
🔎 With this, I ask you: is this security or censorship disguised as protection? Why should there be a crypto that can be blocked or even erased from your account by a centralized institution?
The truth is that Circle is subject to the rules of the US financial system. It is registered, audited, and complies with anti-money laundering (AML) and counter-terrorism financing (CFT) laws.
This makes USDC more reliable for companies and institutions that need to operate within the law — with traceability and reversibility, if necessary. Moreover, it clarifies the rules regarding its use, ensuring predictability for companies.
🤔But what’s the advantage for you?
For ordinary users, if your stablecoin is stolen and the case goes to court, it can be recovered.
But it also brings risks: just one misinterpretation or indirect involvement can lead to your funds being frozen.
Stablecoin is a way to send money abroad at a lower cost, as the president's son recently said in Dubai, traditional banks are outdated and charge high fees for this.
👇🏻Now comes the final question: even though the stablecoin is not decentralized, is it worth ignoring an accessible and functional alternative for sending money like $USDC ?
