$USDC Circle, the company behind USDC, maintains a 1:1 peg with the US dollar by holding an amount of cash or cash equivalents that equals the circulating supply of USDC. Thus, if you initiate a transaction to buy one USD coin using 1 dollar, that dollar is deposited and held, and you receive 1 USDC. If you sell 1 USDC in exchange for 1 dollar, the USDC is burned (sent to a wallet without access keys) when the fiat money is returned to your bank account.