USD Coin cenaUSDC $1

Following the collapse of TerraUSD, stablecoin issuers have been under intense scrutiny over the quality of the reserves backing their tokens. In a transparency move, Circle Internet Financial LLC (Circle), the issuer of the USDC stablecoin released its reserves report as of July 31, 2022.

According to the report, the total USDC reserves held by the company consist of $42.3 billion worth of US Treasury Securities and total cash deposits of $12.2 billion. The monthly reserve report was issued by leading global accounting firm Grant Thornton.

The accounting firm later released an independent attestation dated August 24, 2022. It reads:

“In our opinion, the Reserve Information in the accompanying USDC Reserve Report as of July 31, 2022 is fairly stated, based on the criteria set forth in the USDC Reserve Report, in all material respects.”

The Centre Consortium has two founding members. One of them is the peer-to-peer payment services company Circle, while the other is the Coinbase cryptocurrency exchange. Other crypto ventures are open to join this consortium.

Explaining the rationale behind USDC, Circle co-founders Jeremy Allaire and Sean Neville wrote: “We believe that an open internet of value exchange can transform and integrate the world more deeply, eventually eliminating artificial economic borders and enabling a more efficient and inclusive global marketplace that connects every person on the planet.”

In 2020, Circle and Coinbase collectively announced a major upgrade to USDC’s protocol and smart contract. The goal of these enhancements is to make it easier for USD Coin to be used for everyday payments, commerce and peer-to-peer transactions.

The stablecoin market has become exceedingly crowded over recent years — but USD Coin has aimed to stand head and shoulders over competitors in several ways.

One of them concerns transparency — and giving users the assurance that they will be able to withdraw 1 USDC and receive $1 in return without any issues. To this end, it says a major accounting firm is tasked with verifying the levels of cash that are held in reserve, and ensuring this matches up with the number of tokens in circulation.

Unlike some crypto ventures, Circle and Coinbase have also achieved regulatory compliance — and this has helped pave the way for international expansion. Both projects are also well-funded, giving the stablecoin certainty.

Coinbase briefly contemplated diversifying the funds backing USDC, but retracted that proposal after heavy community backlash. The transparency over the provenance of its funds has been a big reason for USDC's success. Unlike its rival USDT, which has found itself embroiled in repeated investigations, USDC has never been accused of any wrongdoing. That has led to USDC gobbling up much of USDT's dominance in the stablecoin market: although USDT commanded a 74%:16% lead in market share in February 2021, this has shrunk to a 45%:30% lead in February 2022.

In a seemingly loosely regulated space, USDC has continued to distinguish itself from other stablecoin projects by forging ties with traditional financial institutions.

Following a $400 million funding round, which saw participation from BlackRock, Fidelity, Fin Capital, and Marshall Wace LLP, BlackRock revealed that it had “entered into a broader strategic partnership with Circle, which includes exploring capital market applications for USDC.”

In addition to partnering with the world’s largest asset manager, the stablecoin provider has inked other deals with big names from the world of traditional finance. In March, news broke that America’s oldest bank BNY Mellon would serve as the primary custodian of the assets backing USDC stablecoins. Meanwhile, a press release revealed that BlackRock will serve as a primary asset manager of USDC cash reserves.

What is a stablecoin?

Find out about USDT, one of USDC’s biggest competitors

Detailed definitions for stablecoins in the CoinMarketCap glossary

CoinMarketCap Blog: Insightful analysis and features

It’s a bit difficult to give an exact number here — as in theory, the number of USDC that can exist is limitless. New coins are created in line with demand, whenever someone wants to purchase one with their humble dollar.

That said, there have been factors that have helped USD Coin enjoy an explosion in popularity over the years — especially in 2020. One of them is the sudden, sharp rise in the popularity of decentralized finance. USDC is a common sight on many DeFi protocols given how it serves as an onramp to the wider ecosystem.

As you might expect, one of the most enthusiastic exchanges that offers USDC is Coinbase, given how the exchange was involved in this stablecoin’s creation. USD Coin can also be purchased and traded on Poloniex, Binance, OKEx and Bitfinex, as well as decentralized exchanges such as Uniswap.

USDC is commonly bought with Bitcoin — and if it’s your first time buying Bitcoin, be sure to check out our comprehensive guide here.