USDC
A dollar-pegged stablecoin issued by Circle and designed to track the value of one U.S. dollar.
USDC is a stablecoin, meaning a cryptocurrency built to maintain a steady value rather than fluctuate like Bitcoin or Ether. It is issued by Circle and is intended to be redeemable on a 1:1 basis for U.S. dollars, with reserves held in cash and short-term U.S. government securities. USDC exists on multiple blockchains, so users can send, receive, and use it in crypto apps without relying on traditional bank transfers for every transaction.
USDC matters because it gives traders, businesses, and everyday users a dollar-like asset that can move on blockchain networks. It is commonly used to move funds between exchanges, pay for goods or services, provide liquidity in decentralized finance, or hold value during periods of market volatility. For example, someone selling Ether may convert the proceeds into USDC to stay in crypto infrastructure while reducing exposure to price swings. Like other stablecoins, USDC still carries risks, including issuer, reserve, regulatory, and blockchain-related risks.
Other terms in Stablecoins
Algorithmic Stablecoin
A stablecoin that uses software rules and market incentives to try to keep its price near a target, usually without full collateral backing.
Collateralized Stablecoin
A stablecoin backed by assets held as collateral to help keep its price close to a target value, usually a fiat currency like the US dollar.
DAI
A crypto-backed stablecoin designed to track the value of the U.S. dollar without relying solely on bank deposits.
Depeg
A depeg happens when a stablecoin or pegged crypto asset trades noticeably away from the value it is meant to track.