What You Need To Know About USD Coin (USDC) (2024)

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Everything you need to know about the history and development of USD Coin

Eric Rosenberg

Eric Rosenberg is a financial writer with more than a decade of experience working in banking and corporate accounting. He specializes in writing about cryptocurrencies, investing and banking among other personal finance topics. Eric has an MBA in finance from the University of Denver.

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Updated on May 31, 2022

Reviewed by

Amilcar Chavarria

Reviewed byAmilcar Chavarria

Amilcar Chavarria is a fintech and blockchain entrepreneur with expertise in cryptocurrency, blockchain, fintech, investing, and personal finance.

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Fact checked byMrinalini Krishna

What Is USD Coin?

USD Coin is a stablecoin with a fixed value of $1 per coin. It was developed by Centre, a technology project backed by cryptocurrency exchange Coinbase and Fintech company Circle.

Note

Every USDC is backed by a U.S. dollar in a bank account audited monthly by accounting firm Grant Thornton.

Because it’s always worth $1 and is very safe and secure, at least in cryptocurrency terms, holding USDC in a secure cryptocurrency wallet is the closest thing to a traditional savings account in the crypto markets.

It works with many ERC-20 compatible wallets, a long list of cryptocurrency exchanges, and has real-world use in global commerce and money transfers. It could also be useful as a store of value in your crypto portfolio.

USDC’s founding companies have extensive experience in the cryptocurrency world. Coinbase is one of the leading cryptocurrency exchanges. Circle is not only backed by crypto-focused investors such as Bitmain and Blockchain Capital, it also owned crypto-exchange Poloniex between 2018 and 2019. In 2021, Circle announced its intentions of becoming a national digital currency bank.

Special Features of USD Coin

The main unique feature of USD Coin is that it’s always worth $1. That’s a big difference from highly volatile coins including Bitcoin, Ethereum, and Dogecoin that may see big price swings in a single day.

USD Coin isn’t the only stablecoin. Other major stablecoins pegged to the dollar include Tether (USDT), Binance USD (BUSD), and Dai. Binance USD is a similar stablecoin backed by a major cryptocurrency exchange. Tether courted some controversy over the reserves backing the stablecoin. Dai runs on the Maker protocol and acts as an alternative major player in the crypto community.

	USD Coin
Inception	September 2018
Already Minted (as of July 2021)	25 Billion USDC
Special Feature	Fixed value of $1 per USDC

How To Mine USD Coin

You can’t mine USD Coin. New coins are minted every time someone buys or converts currency and acquires USD Coin. If that happens, a new dollar is added to the bank account behind USD Coin.

How To Invest in USD Coin

As a major force in creating USDC, Coinbase is the easiest place to buy USD Coin.

Note

If you hold 1 USDC or more in a Coinbase account, you are eligible for USDC rewards, effectively earning interest on your USDC balance. The APY, as of June 3, 2020, is just a hair under 0.15%.

That’s better than many traditional savings accounts but falls short of the typical high-yield savings account.

USD Coin is also available to trade on a number of other popular cryptocurrency exchanges, including Binance, Bitfinex, Coinbase, Crypto.com, Kraken, and Uniswap.

Wallets

Because USD Coin runs on the Ethereum blockchain, it is widely supported by popular cryptocurrency wallets. These include software wallets such as Coinbase Wallet and Exodus or hardware wallets such as Ledger.

Transaction Times

According to Kraken, USD Coin transactions take about five minutes to complete and require 20 confirmations. That’s similar to other coins that run on the Ethereum blockchain.

Fees and Expenses

Because it uses the Ethereum blockchain, USDC transactions require Ethereum gas fees. Ethereum gas can fluctuate based on network congestion.

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Sources

The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.

Coinbase. "Introducing USD Coin(USDC) - Stablecoin by Coinbase."
Centre. "Introducing USD Coin: A Stablecoin Brought to You by Circle and Coinbase."
Circle. "Our Journey To Become a National Digital Currency Bank."
Circle. "Introducing USD Coin."
Circle. "USDC: The World's Leading Digital Dollar Stablecoin."
Coinbase. "USD Coin Rewards FAQ."
Centre. "Introducing USD Coin."
Kraken. "Cryptocurrency Deposit Processing Times."

What Is a Stablecoin? How Do Stablecoins Work?eToro vs. CoinbaseCoinbase vs. Coinbase Pro: How Do They Compare?Exodus vs. CoinbaseCryptocurrency Tokens vs. Coins: What's the Difference?Best Cryptocurrency ExchangesKraken vs. Coinbase

What Is a Cryptocurrency Wallet?What Are Digital Assets?Binance vs. Coinbase Crypto.com vs. CoinbaseWhat Is Etherscan and How Do You Use It?What Is an Initial Coin Offering?Flow Cryptocurrency (FLOW) ExplainedTether (USDT) Explained

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USD Coin (USDC) is a stablecoin pegged to the US dollar, designed to minimize the volatility inherent in other cryptocurrencies like Bitcoin or Ethereum. Created by Centre, a collaboration between Coinbase and Circle, USDC maintains a value of $1 per coin, backed by an equivalent amount held in a dedicated bank account. The stability and safety of USDC make it an attractive option for individuals seeking to participate in the crypto market without the substantial risks associated with other digital assets.

One significant aspect validating USDC's stability is its backing by a U.S. dollar held in a bank account, a fact audited monthly by Grant Thornton, an established accounting firm. This reassures investors about the coin's reliability, similar to the backing of traditional fiat currencies by governments or financial institutions.

USDC’s emergence in September 2018, with 25 billion coins already minted by July 2021, underscores its growing prominence within the cryptocurrency sphere. Moreover, its integration with ERC-20 compatible wallets and multiple cryptocurrency exchanges indicates its widespread acceptance and utility in global commerce and financial transactions.

Compared to highly volatile cryptocurrencies like Bitcoin or Ethereum, USDC stands out due to its unique feature—a fixed value of $1 per coin. This stability differentiates it from other stablecoins like Tether (USDT), Binance USD (BUSD), and Dai. While USDC offers a consistent value, Tether has faced controversies regarding its reserves, while Dai operates within the Maker protocol as an alternative stablecoin choice.

Unlike mining typical cryptocurrencies, USDC cannot be mined. Instead, new coins are minted when someone purchases or converts currencies to acquire USDC, with each purchase adding an equivalent dollar to the backing bank account.

Investing in USDC is relatively accessible through platforms like Coinbase, which also offers USDC rewards for account holders with a balance of 1 USDC or more, effectively allowing users to earn interest. Additionally, it's available for trading on various cryptocurrency exchanges such as Binance, Bitfinex, Kraken, and more.

USDC operates on the Ethereum blockchain, allowing compatibility with popular cryptocurrency wallets like Coinbase Wallet, Exodus, or hardware wallets such as Ledger. Transaction times for USDC are approximately five minutes with 20 confirmations required, similar to other Ethereum-based cryptocurrencies. However, transaction fees fluctuate based on Ethereum gas fees, which are subject to network congestion.

Overall, USDC's stable value, backing by established entities like Coinbase and Circle, widespread acceptance, and integration into major exchanges and wallets contribute to its credibility and utility in the cryptocurrency market.