$USDC USD Coin (USDC) is one of the most popular stablecoins, issued by Circle in 2018. It is pegged to the US dollar at a 1:1 ratio and is backed by reserves in fiat currency and liquid assets. Due to its transparency and regulatory compliance, USDC is widely used in the crypto economy.
How does USDC work?
USDC is a token operating on multiple blockchains, including Ethereum, Solana, Polygon, and Avalanche. Its issuance is controlled by Circle, and each issued coin is backed by a dollar equivalent held in the accounts of regulated financial institutions. The company regularly publishes reserve reports confirming compliance with obligations.
Advantages of USDC
Stability – unlike volatile cryptocurrencies, the price of USDC is always equal to 1 dollar.
Transparency – reports on the coin's backing are published monthly, and reserves are held in reputable financial institutions.
Regulatory compliance – Circle collaborates with regulators to meet legal requirements.
Widespread use – USDC is used for trading, DeFi, international transfers, and settlements.
Risks and challenges
Although USDC is considered one of the most reliable stablecoins, it faces several challenges:
Competition – USDT (Tether) dominates the market, and new stablecoins, such as PYUSD from PayPal, are also emerging.
Regulatory pressure – rules for working with digital assets are tightening in the USA and other countries.
Financial crises – in March 2023, USDC temporarily lost its peg to the dollar due to the bankruptcy of Silicon Valley Bank, where Circle's reserves were held.
Withdrawal
USDC remains an important part of the cryptocurrency market, offering stability and transparency. However, its future depends on regulation, competition, and user trust.$USDC
