USDC: what it is, who issues it and how it works

What USDC is and who issues it

USDC is a US dollar stablecoin: a token meant to be worth exactly $1 because the issuer holds a dollar of reserves for every token outstanding and redeems tokens for dollars. It is issued by Circle, whose parent company, Circle Internet Group, Inc., is incorporated in Delaware, has its head office at One World Trade Center in New York and lists its Class A shares on the New York Stock Exchange as CRCL. Circle's 2025 annual report says the company was founded in 2013 and that USDC had more than $75 billion in circulation on 31 December 2025.

Two Circle entities matter for USDC. Circle Internet Financial, LLC holds Circle's New York virtual currency license, and Circle describes itself as a licensed money transmitter in the US. Circle Internet Financial Europe SAS, referred to in the annual report as Circle France, holds an electronic money institution (EMI) license that allows it to issue USDC and EURC in the European Economic Area. Circle's euro stablecoin, EURC, is a separate token and is not covered here.

How USDC is minted and redeemed

New USDC is created only by Circle, through an institutional account service called Circle Mint.

1. Apply. A business applies for a Circle Mint account and has to pass Circle's screening, which the annual report lists as ID verification, know-your-customer (KYC) checks, sanctions screening and suitability checks.
2. Mint. The customer sends US dollars to Circle and receives the same amount of USDC on a supported blockchain.
3. Redeem. The customer returns USDC and Circle pays out dollars one for one. Circle's 10-Q for the second quarter of 2026 says it does so except in limited cases, such as when the law or a court order prohibits it or fraud is suspected.

The same 10-Q says Circle does not redeem stablecoins for holders who are not Circle Mint customers, with exceptions where specific regulation requires it, as in the EU. In practice most people buy and sell USDC through an exchange, broker or wallet app, so their dollar exit depends on that platform, not on Circle. Our guide to buying crypto safely covers how to pick and check a platform.

Which blockchains USDC runs on

Circle's developer documentation lists 38 mainnet networks for USDC, including Ethereum, Solana, Base, Arbitrum, OP Mainnet, Polygon PoS, Avalanche, Stellar, Sui, the XRP Ledger and Circle's own Arc blockchain. Each deployment has its own official address. On Ethereum it is 0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48, and on Solana it is EPjFWdd5AufqSSqeM2qN1xzybapC8G4wEGGkZwyTDt1v.

USDC on one chain is not automatically the same as a token called USDC on another. Circle distinguishes native USDC, which it issues directly, from bridged versions such as USDC.e that it does not issue. Circle's Cross-Chain Transfer Protocol (CCTP) is its own route for moving native USDC between supported chains. On Ethereum, Etherscan showed a total supply of about 47.7 billion USDC on 1 November 2026, with 6 decimal places.

What backs USDC

Most of the reserve sits in the Circle Reserve Fund, a money market fund operating under the SEC's Rule 2a-7 and managed by BlackRock Advisors, LLC. Its summary prospectus says shares are available only to Circle Internet Financial, LLC and Circle Internet Financial Europe SAS, and that the fund invests at least 99.5% of its assets in cash, US Treasury securities and repurchase agreements backed by them. The annual report puts about 88% of USDC reserves in the fund at the end of 2025, with the rest, typically 10% to 20%, held as cash mainly at banks designated as global systemically important.

At 30 June 2026, Circle's 10-Q showed $73.2 billion of cash and cash equivalents segregated for stablecoin holders, $61.9 billion of it in the Circle Reserve Fund (about 85%). The fund's net asset value was $1.00 per share in every period reported. These figures cover all Circle stablecoins, not USDC alone. Circle says independent assurance on the reserves is currently provided by a Big Four accounting firm. An attestation or assurance report checks the reserve at the dates it covers; it is not a guarantee.

How Circle earns money from USDC

Circle's revenue comes mainly from interest on the reserves: reserve income was 96.0% of total revenue from continuing operations in 2025, according to the annual report, and $667.7 million in the second quarter of 2026 alone. A large part goes back out to distribution partners. Second-quarter distribution and transaction costs were $410.4 million. The annual report says payments to Coinbase are tied mainly to net reserve income from USDC, allocated by how much USDC sits on each company's platform, with Coinbase also taking half of the remaining income from USDC held elsewhere, after payments to approved third parties. Holders of USDC receive none of this reserve income.

Regulation

• United States: Circle operates under state money transmitter licensing and New York's virtual currency regime. The GENIUS Act, the federal payment-stablecoin law signed on 18 July 2025, takes effect on the earlier of 18 January 2027 or 120 days after its implementing regulations are issued, according to the annual report.
• Federal charter: Circle applied to the Office of the Comptroller of the Currency for a national trust bank charter on 30 June 2025 and received preliminary conditional approval in December 2025. In its March 2026 annual report, full approval was still pending.
• European Economic Area: Circle France issues USDC under its EMI license, supervised by France's ACPR, and the annual report notes that some EU holders who are not Circle Mint customers can redeem directly with it.

The March 2023 depeg

Circle's annual report recounts that in March 2023 it disclosed it had begun transferring more than $3 billion of deposits from Silicon Valley Bank, which caused USDC to experience a temporary price dislocation on some secondary markets. The report raises the episode as a risk factor: a failure at a bank holding reserve cash can move USDC's market price even while the token stays redeemable at par for Circle Mint customers.

Risks to understand

• Addresses can be blocked and the contract paused. Circle's published token design for its EVM contracts includes a blacklister role that can stop all transfers to and from an address, and a pauser role that can halt all transfers, minting and burning.
• The contract can be upgraded. On Ethereum, USDC is a proxy contract whose logic Circle can replace. Circle's design document says only the admin role can perform an upgrade.
• Most holders rely on intermediaries. Without a Circle Mint account, converting to dollars depends on an exchange or app being open, solvent and willing.
• Bank and fund concentration. Reserves sit mainly in one money market fund and a set of large banks, which is the exposure the 2023 episode showed.

USDC and other dollar stablecoins

The "USDC vs USDT" question comes down to issuer, regulator, reserve disclosure and who can redeem. Our Tether (USDT) profile sets out those facts for Tether, and the guide on how to assess a stablecoin gives the questions to ask of any issuer. Our stablecoin ratings compare issuers on published criteria, and USDC is assessed separately in our USDC review. This profile describes the token and does not grade it.