USDC USDC

Circle, an American company, issues this dollar token built to rules the traditional financial market recognises. Every USDC in circulation is matched by a dollar held by the issuer — cash and short-dated US Treasury obligations — and the reserve composition is disclosed in regular reports from an independent auditor.

The token circulates on several chains at once, and conversion into actual dollars runs through the issuer's accounts rather than an exchange: an institutional client wires currency and receives tokens, returns tokens and receives currency. It is that direct route to par, not exchange demand, that holds the peg. The contract lets the issuer freeze an address at law enforcement's request, which is the price of fitting into a regulated perimeter.

Circle's bet is on regulatory fit: the token is shaped to European and American rules for reserve-backed payment tokens. That is what earned it its place in corporate, exchange and payment-service settlement.

The flip side of bank-held backing is dependence on banks: in March 2023 the token traded away from a dollar because part of its reserves was stuck in a failed bank.