What is USDC?

USDC (USD Coin) is a stablecoin pegged 1:1 to the US dollar, issued by Circle and launched in 2018. Each USDC is backed by reserves held in regulated financial institutions, with monthly attestations from a Big Four accounting firm. USDC operates natively on 30+ blockchains including Ethereum, Solana, and Arbitrum.

Key features of USDC

• Second-largest stablecoin: USDC holds $76 billion market cap with 26% stablecoin market share
• Regulatory compliance: 98.9% reserves held in short-term US Treasuries and cash equivalents
• Multi-chain native: Works natively on 28+ blockchains without bridges or wrapped tokens
• Institutional trust: Used by Visa, PayPal, Stripe, and Shopify for mainstream payment infrastructure
• Monthly attestations: Independent accounting verification published every month by Grant Thornton
• Cross-Chain Transfer Protocol: Move USDC between blockchains in under 30 seconds without third-party bridges

USDC statistics for 2026

USDC has emerged as the institutional standard for digital dollars:

• $76 billion market capitalization as of late 2025 per The Block, up from $24.6 billion in October 2024, representing 78% year-over-year growth according to Circle, faster than any other major stablecoin
• 26% of the global stablecoin market per The Block data, with 27% of all stablecoin trading volume in early 2025 according to CoinLaw
• 63% of total stablecoin transaction activity in Q3 2025 despite holding only 24.3% market share per AInvest analysis, demonstrating institutional preference for regulated stablecoins over retail-focused alternatives
• 69% share of DeFi stablecoin trading volume through November 2024 according to Circle's State of USDC report, as DeFi total value locked rebounded to $126 billion
• $585 billion in monthly transfer volume reached in March 2025 per Amberdata, up from $467 billion in January—though below the $762 billion peak in July 2024
• $97,900 average transaction size according to Amberdata Q1 2025 analysis, reflecting broad retail participation compared to DAI's $812,000 average which indicates institutional DeFi usage
• 87 million unique wallet addresses hold USDC globally as of Q1 2025 per CoinLaw, with 2.1 million new wallets created in February 2025 alone across Ethereum, Solana, and Avalanche
• $2.6 billion locked in institutional DeFi lending on Aave Arc as of March 2025 according to CoinLaw, demonstrating institutional trust in USDC as collateral
• 19.6% of USDC used on DEXs, 18.6% on lending platforms, and 17.5% in derivatives protocols according to CoinLaw, showing diverse DeFi applications
• 58% of top 100 DAO treasuries hold USDC per CoinLaw comparison data, far exceeding USDT's 24% share among decentralized organizations
• $1.1 billion in Circle Yield assets under management with 87% held in USDC according to CoinLaw, demonstrating institutional treasury adoption
• Universities including MIT, Stanford, and Oxford are piloting USDC for tuition payments with tens of millions in pilot volumes in 2024-2025 per CoinLaw data

How does USDC maintain its value?

USDC stays equal to $1 through a reserve system managed by Circle:

Mint and burn mechanism:

• When someone deposits US dollars with Circle, the company mints new USDC tokens equal to the dollars received
• When someone redeems USDC for dollars, Circle burns those tokens and returns the equivalent dollars
• This process controls supply based on demand

Reserve composition:

• Cash deposits at regulated US banks
• Short-term US Treasury bills
• Overnight repurchase agreements backed by US government securities
• Over 98% of reserves consist of highly liquid, low-risk assets

Independent verification:

• Grant Thornton provides monthly attestation reports
• Reports confirm Circle's reserves equal or exceed USDC in circulation
• Published within days of each month's end on Circle's website

Regulatory structure:

• Reserves held in the Circle Reserve Fund, an SEC-registered government money market fund
• Provides institutional-grade custody and regulatory oversight
• Circle maintains banking relationships with multiple institutions to spread risk

Where USDC is used

USDC serves as infrastructure for both crypto-native applications and mainstream payment systems:

• Payment processors: Visa enables USDC settlement on Solana for real-time transactions. Stripe integrated USDC on Base for subscription payments and merchant checkout. Shopify added USDC payment acceptance through its Payments platform in June 2025.
• Cross-border payments: Businesses use USDC to pay international suppliers instantly rather than waiting days for wire transfers to clear. Recipients receive dollars immediately without currency conversion fees or intermediary banks taking cuts.
• DeFi protocols: Lending platforms accept USDC as collateral for borrowing other assets. Liquidity pools use USDC as a stable trading pair. Yield-generating protocols allow users to earn interest on USDC deposits.
• Treasury management: Decentralized autonomous organizations (DAOs) hold 58% of their treasuries in USDC among the top 100 DAOs. Companies use USDC for payroll and operational expenses in cryptocurrency-friendly jurisdictions.
• E-commerce: Merchants accept USDC for goods and services, particularly in regions with limited banking access or high credit card fees. Prediction markets like Polymarket use USDC exclusively for trading.
• Remittances: People working abroad send USDC home to family members who can convert it to local currency through exchange services or hold it as digital dollars.

USDC on different blockchains

USDC operates natively on over 30 blockchains, each optimized for different use cases.

• Ethereum hosts the majority of USDC supply at $45-50 billion, representing 23.3% of total USDC usage. Transaction costs average $0.56, making Ethereum suitable for large-value transfers where security and decentralization justify higher fees. Regulated issuers including BlackRock, PayPal, and Ripple launched their stablecoins on Ethereum first, establishing it as the foundation for institutional adoption. Ethereum processed over 500 million USDC transactions in 2025.
• Arbitrum leads Ethereum Layer 2 networks with $10 billion in stablecoins and 9.5% of USDC usage. Transaction costs range from $0.05 to $0.30, offering Ethereum compatibility with significantly lower fees. Robinhood launched tokenized stocks on Arbitrum in 2025, using USDC for settlement.
• Base has grown to $4.6 billion in stablecoin supply, largely USDC, with 6.1% usage share. As Coinbase's Layer 2, Base benefits from direct exchange liquidity and institutional connections. Stripe enabled USDC subscriptions on Base, putting stablecoin checkout within reach of mainstream merchants.
• Solana accounts for 15% of USDC usage with transaction costs between $0.0001 to $0.0005, fractions of a penny. Block times average 400 milliseconds, enabling instant payments. Visa added Solana for USDC settlement and PayPal brought PYUSD to Solana for consumer payments. Solana's stablecoin supply expanded by over 170% in 2025.
• Polygon holds $2.7 billion in stablecoins with 8.5% of USDC usage. Transaction costs average $0.002 with 2-second block times, making it ideal for micropayments. Revolut processed over $800 million volume through Polygon by December 2025. Polymarket generated $3.7 billion in 30-day trading volume in November 2025 using USDC on Polygon.
• BNB Chain accounts for 21.6% of USDC usage, closely following Ethereum. The network integrates tightly with Binance's exchange infrastructure, providing efficient on-ramps and trading pairs for USDC users.
• Avalanche, Optimism, and others round out USDC's multi-chain presence. Optimism supports 1.5% of USDC activity as another Ethereum Layer 2 option. Avalanche offers fast settlement and low costs for DeFi applications requiring USDC liquidity.

Circle's Cross-Chain Transfer Protocol (CCTP) enables native USDC transfers between blockchains in under 30 seconds. CCTP burns USDC on the source chain and mints it on the destination chain, eliminating wrapped tokens and improving capital efficiency. Supported chains include Ethereum, Solana, Avalanche, Arbitrum, Base, Polygon, and Optimism.

Regulatory compliance and transparency

USDC differentiates itself through regulatory oversight and transparent reporting.

Circle operates as a licensed money transmitter in the United States and holds an Electronic Money Institution license in the European Union. These licenses require Circle to maintain specific reserve requirements and undergo regular regulatory examinations.

The USDC reserves sit in the Circle Reserve Fund, an SEC-registered government money market fund. This structure provides institutional-grade custody and regulatory oversight of the backing assets.

Grant Thornton publishes monthly attestation reports confirming reserves match or exceed circulating USDC. These reports detail the exact composition of reserves, typically showing 80%+ in short-term US Treasury bills, with the remainder in cash and overnight repos.

The July 2025 GENIUS Act provided federal regulatory framework for stablecoins in the United States. Circle has positioned USDC to comply with these standards, including reserve transparency, redemption guarantees, and issuer licensing requirements.

Circle also cooperates with law enforcement investigations and implements compliance measures including transaction monitoring and address screening. The company can freeze USDC at specific addresses when legally required, though this centralized control creates debate about censorship resistance versus regulatory compliance.

USDC vs USDT

USDC and USDT both serve as dollar-pegged stablecoins but differ significantly in approach.

• Transparency: USDC provides monthly attestations from Grant Thornton. USDT provides quarterly attestations but no full audits. USDC's reserves consist almost entirely of cash and Treasury bills, while USDT's reserves include more diverse assets.
• Regulatory status: Circle operates under money transmitter licenses and aims for full regulatory compliance. Tether has faced regulatory enforcement actions including a $41 million CFTC fine and $18.5 million New York AG settlement.
• Market position: USDT holds 70% market share with $187 billion circulation. USDC has 26% share with $76 billion. USDT dominates trading pairs on exchanges, while USDC dominates institutional DeFi applications.
• Blockchain distribution: USDT heavily concentrates on Tron (49% of activity) for remittances. USDC distributes more evenly across Ethereum (23%), BNB Chain (22%), and Solana (15%) for varied use cases.
• Redemption: Circle offers direct USDC redemption for any amount. Tether requires minimum redemptions of $100,000, making it less accessible for smaller users.

Both stablecoins serve critical roles in cryptocurrency infrastructure, with USDT prioritizing accessibility and liquidity while USDC emphasizes compliance and institutional trust. For a detailed comparison, see our analysis of USDT vs USDC on our blog.

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