Who is behind USDC?

USDC is issued by Circle, which was founded in 2013. Circle is a publicly listed, regulated company, which means it is required to publish its financial statements and open its books to regulators and public shareholders.

What backs USDC?

Every USDC in circulation is backed one-to-one by US dollars or short-term US Treasury securities. These reserves are held primarily in the Circle Reserve Fund, which is managed by BlackRock, the world's largest asset management firm, and custodied at BNY Mellon, one of the oldest and largest banks in the United States. Circle publishes monthly reports showing that the reserves match the amount of USDC in circulation. These reports are attested by Deloitte, one of the world's largest independent accounting firms.

How is USDC created and redeemed?

When US dollars are deposited with Circle, Circle holds those dollars in reserve and mints (creates) an equal amount of USDC. When USDC is redeemed, it is burned (removed from circulation) and the dollars are returned. The total amount of USDC in circulation always matches the reserves held. This process is verifiable on the blockchain at any time.

Most people do not interact with Circle directly. They get USDC through apps and services - like Sovra - that handle the process for them. But at the infrastructure level, every USDC in existence was created through this same mint and burn process.

How is USDC different from USDT?

USDT, issued by Tether, is the largest stablecoin by market size. Both are designed to be worth one dollar. The main differences are in transparency and regulation. Circle is a publicly listed, regulated company that publishes monthly reserve reports audited by Deloitte. Tether is a private company that publishes quarterly reports. Both play an important role in the stablecoin ecosystem, but they offer different levels of visibility into their operations.

Is USDC safe?

No financial product is without risk. The key risks to be aware of with USDC are:

The reserves depend on the institutions that hold them. If any of those institutions were to face financial difficulties, it could temporarily affect the value of USDC. Circle has structured its reserves to reduce this kind of risk by holding them primarily in the BlackRock-managed Reserve Fund and US Treasury securities.

USDC is issued by a single company. If something were to happen to Circle as a business, it could affect USDC. However, because Circle is publicly listed, regulated, and audited, there is more visibility into its operations than with most stablecoin issuers.

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