USD Coin, ticker USDC, is a stablecoin designed to hold a value of one US dollar, issued by Circle and backed by cash and short-term US Treasury bills. It is the second-largest stablecoin, with circulation near $77 billion in May 2026, roughly a quarter of a stablecoin market worth about $321 billion. Its defining feature is regulatory positioning: USDC is the only top-ten stablecoin authorized under the European Union's MiCA framework.
How USDC works
A closed loop. Dollars in, tokens out.
Send Circle a dollar, and it mints one USDC. Send a USDC back, and Circle burns the token and returns the dollar. No algorithm holds the peg and no second token props it up. Instead the peg holds on two things: Circle's promise to redeem at par, and traders who buy USDC below a dollar and redeem it for a full one, pushing the price back up.
Reserves cannot be lent out or reused as collateral elsewhere. From the model where an issuer earns extra yield by putting reserves to work, that restriction is the dividing line.
USDC reserves: Treasury bills and cash
Two pools, in a roughly 80/20 split.
In the Circle Reserve Fund, a government money market fund registered with the SEC and managed by BlackRock, sit most of the reserves, held as short-dated US Treasury bills maturing within about three months. The rest is cash at regulated US banks.
Monthly attestations from Deloitte get published. Worth knowing what that does and does not prove: an attestation confirms the balances existed at a moment in time. A full audit examines controls and processes over a period. More frequent than most competitors manage, monthly attestation is still not an audit.
One more thing the reserves do not include: you. To Circle, not to USDC holders, goes the yield earned on those Treasury bills. That is deliberate, and it is part of why the structure satisfies both the GENIUS Act and MiCA, which prohibit issuers from paying interest on the token itself.
USDC's regulatory position by jurisdiction
Here sits USDC's whole competitive argument, so it is worth laying out precisely.
| Jurisdiction | Status |
|---|---|
| European Union | Circle Mint France received an Electronic Money Institution license from the ACPR on 1 July 2024, making USDC the first major global stablecoin authorized under MiCA |
| United States | Money transmitter licenses across 49 states plus a New York BitLicense, registered with FinCEN, positioned for the GENIUS Act framework effective January 2027 |
| Singapore | Circle Singapore holds a Major Payment Institution license from the Monetary Authority of Singapore |
| Corporate | Circle listed on the NYSE on 5 June 2025 under ticker CRCL, so it now files quarterly and annual reports with the SEC |
When Tether chose not to restructure USDT to meet MiCA's requirement that significant issuers hold a minimum share of reserves in European banks, EU exchanges delisted it. Into that space stepped USDC. Research published in July 2026 by economists Nicola Borri and Kirill Shakhnov found overall market shares barely moved. The main effect was a roughly 20% drop in USDT volume on EU-facing venues, and a corresponding shift toward USDC there.
When USDC lost its peg in March 2023
March 2023, and the lesson is more useful than the incident.
Circle disclosed that $3.3 billion of USDC reserves sat at Silicon Valley Bank, which had just failed. Over a weekend, with banks closed and redemption impossible, USDC fell to about $0.87. Once US regulators guaranteed SVB deposits and banks reopened, the peg recovered within 72 hours.
Against Circle not having the money, full reserves protected. Against the bank holding some of that money failing, or a redemption window shut when everyone wanted out at once, they did not. That distinction is the single most useful thing to understand about any fiat-backed stablecoin.
USDC vs USDT
| USDC | USDT | |
|---|---|---|
| Issuer | Circle, NYSE-listed | Tether, privately held |
| Circulation, May 2026 | Around $77 billion | Around $140 billion |
| Reserve reporting | Monthly attestations by Deloitte | Quarterly attestations |
| MiCA authorized | Yes | No, delisted by EU exchanges |
| Primary demand | Regulated venues, US and EU institutions | Offshore trading, emerging markets |
| Known depeg | About $0.87, March 2023 | About $0.945, 2022 |
Both are fiat-backed dollar tokens. For regulatory acceptance USDC optimizes; for reach and liquidity USDT does, which is why the larger one is not the more regulated one.
What USDC is used for
- Trading. A base currency pair on centralized and decentralized venues, though USDT still carries deeper liquidity on many centralized order books.
- Payments and settlement. Cross-border business payouts and remittances that settle in minutes rather than days. Visa, Mastercard, and Stripe all run USDC integrations.
- Treasury holdings. Companies and protocols holding dollars that move outside banking hours.
- DeFi collateral, across lending protocols and liquidity pools.
- Dollar access in countries where holding actual dollars is difficult.
USDC risks to understand
- Issuer risk. USDC is a claim on Circle. Its value depends on Circle holding what it reports and honoring redemptions.
- Not FDIC insured. Circle states this explicitly. No deposit guarantee scheme covers it.
- Banking exposure. The March 2023 depeg came from a bank failure, not from Circle.
- Freezing. Circle can and does blocklist addresses at law enforcement request, which protects against theft and means your balance is not unconditionally yours.
- Attestation, not audit. Monthly balance confirmations are not the same as an examination of controls.
- Concentration. Two issuers account for the large majority of all stablecoin supply.
Where mb.io fits
For most crypto trading, stablecoins are the base currency, which makes where you hold them a counterparty decision as much as a currency one.
mb.io is a regulated crypto spot exchange backed by MultiBank Group, a financial institution founded in 2005 that serves more than 2 million clients across 100+ countries.
- Regulated by VARA in the UAE and AUSTRAC in Australia
- 10/10 security score from Hacken, an independent blockchain security auditor
- Institutional-grade MPC custody powered by Fireblocks, with segregated client funds
- Fiat on and off ramps supporting Visa, Mastercard, SWIFT, and PIX
- Buy, sell, and swap in three steps, from sign-up to purchase
- 24/7 multilingual client support
Open your account and start trading on mb.io.
Frequently asked questions
What is USDC?
A stablecoin issued by Circle and designed to hold a value of one US dollar, backed by cash and short-term US Treasury bills. In May 2026, circulation sat near $77 billion, second only to USDT.
Is USDC safe?
Fully backed, monthly attested, and regulated in several major jurisdictions, yes. Also not FDIC insured, dependent on Circle honoring redemptions, and down to about $0.87 in March 2023 when a bank holding part of its reserves failed.
What backs USDC?
Roughly 80% short-dated US Treasury bills held in the Circle Reserve Fund, an SEC-registered government money market fund managed by BlackRock, with the remainder in cash at regulated US banks. Lending them out or rehypothecating them is not permitted.
Why did USDC lose its peg in 2023?
Circle disclosed that $3.3 billion of reserves sat at Silicon Valley Bank when it failed. With banks closed over a weekend and redemption unavailable, USDC traded down to about $0.87, recovering within 72 hours once deposits were guaranteed.
What is the difference between USDC and USDT?
Issued by NYSE-listed Circle, USDC attests monthly and is authorized under MiCA in the EU. Larger and issued by privately held Tether, USDT attests quarterly and was delisted by EU exchanges for not meeting MiCA requirements.
Does holding USDC earn interest?
No. To Circle, not to token holders, goes the yield on the reserves. Both the GENIUS Act and MiCA prohibit issuers from paying interest on a payment stablecoin.
Can Circle freeze my USDC?
Yes. Under a blocklisting policy, Circle can freeze addresses linked to illegal activity or sanctions. That protects against theft, and it means a balance is not unconditionally the holder's.
Is USDC legal in Europe?
Yes. Granted by the ACPR in July 2024, Circle Mint France's Electronic Money Institution license makes USDC the only top-ten stablecoin fully authorized for EU distribution under MiCA.
