$USDC

**What is USDC?**

**USD Coin (USDC)** is a type of **stablecoin**—a cryptocurrency pegged to the value of the US dollar (1 USDC = $1). It was launched in 2018 through a collaboration between **Circle** and **Coinbase** under the Centre Consortium. Unlike volatile cryptocurrencies like Bitcoin or Ethereum, USDC maintains a stable value, making it ideal for payments, trading, and decentralized finance (DeFi) applications.

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**How Does USDC Work?**

USDC operates on **blockchain technology**, primarily on **Ethereum** (as an ERC-20 token), but it has expanded to other networks like Solana, Avalanche, and Algorand.

- **Backed by Reserves**: Every USDC in circulation is backed by **cash and short-term U.S. Treasury bonds**, held in reserve by regulated financial institutions.

- **Transparency**: Monthly audits by accounting firms (like Grant Thornton) verify that reserves match the circulating supply.

- **Smart Contracts**: USDC can be used in DeFi protocols, exchanges, and cross-border transactions with minimal fees.

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**Key Features of USDC**

✅ **Stability**: Pegged 1:1 to the US dollar, reducing volatility.

✅ **Fast & Low-Cost Transactions**: Cheaper and quicker than traditional banking.

✅ **Widely Accepted**: Used in crypto trading, remittances, and DeFi platforms.

✅ **Regulated**: Compliant with U.S. money transmission laws.

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**USDC vs. Other Stablecoins**

| Feature | USDC | USDT (Tether) | DAI |

|--------------|------|--------------|-----|

| **Backing** | Cash & Treasuries | Mixed reserves (cash, loans, etc.) | Crypto-collateralized |

| **Transparency** | Monthly audits | Irregular reporting | Fully transparent (on-chain) |

| **Issuer** | Circle & Coinbase | Tether Ltd. | MakerDAO (decentralized) |

| **Regulation** | Highly regulated | Less transparent | Decentralized |