USDC: What Is It in Simple Terms?

Why Is USDC Needed? 

USDC is a stable cryptocurrency that allows you to store funds in crypto without the risk of a price collapse. 

Who issues USDC, and what is it backed by? 

The stablecoin was created by Circle and Coinbase. The former is responsible for issuing and redeeming tokens, while the latter ensures their wide availability on crypto exchanges and in applications. The token appeared on the market in 2018. 

USDC is backed by the US dollar at a 1:1 ratio. For each token in circulation, $1 or an equivalent asset (e.g., securities) is held in reserve. Reserves are held in regulated financial institutions and investment funds. 

How USDC Works: Technology and Principles 

USDC is based on simple and transparent principles: 

• Issuance and reserves. New USDCs are created when users deposit USD into Circle accounts. 
• Transparent technology. The stablecoin operates on the Ethereum, Solana, Avalanche, and other networks. This allows for fast and secure transactions without the involvement of banks. Each transaction is recorded in a public ledger protected from tampering. 
• Redemption and burning. When a user withdraws USDC in dollars, the tokens are removed from circulation, and the equivalent amount is returned in fiat currency, which maintains the balance.

Where USDC Is Used: Use Cases and Scenarios 

USDC is a convenient tool for a wide variety of tasks in the crypto sphere: 

Trading and investing 

Traders use USDC as a "safe haven" during cryptocurrency price fluctuations. For example, when the price of Bitcoin falls, you can temporarily transfer funds to USDC to lock in profits and reduce risks. 

DeFi platforms 

USDC is used for lending, earning interest, and providing liquidity, which creates opportunities for earning money. 

International transfers

USDC can be sent to different countries. For example, a freelancer in India can receive payment from a client in the US without bank fees or delays. You can exchange USDC to dollars quickly and conveniently through ObmenAT24. 

Risk hedging 

Investors convert volatile assets to USDC to preserve capital when the market falls. This is especially relevant for long-term cryptocurrency holders. 

Payment for goods and services

More and more companies are introducing USDC as a means of payment. You can already pay with stablecoins on Shopify and Travala. 

Advantages and disadvantages of USDC 

Let's first look at the pros: 

Pegged to fiat currency 

The stable exchange rate makes the token convenient for settlements and capital storage, especially during market turbulence. 

Transparency 

Reserves are regularly audited, which increases trust. 

Reliability 

Transactions are recorded on the blokchain, which reduces the risk of abuse and failures. 

Versatility 

The token is easy to exchange for other cryptocurrencies or fiat. It is supported by major exchanges, wallets, and DeFi platforms.

However, stablecoins also have disadvantages:

No growth potential 

The price of USDC does not change, so the asset is not suitable for investment. 

A strong influence of the issuer 

The reputation of a stablecoin depends heavily on Circle and its compliance with financial obligations. 

Regulatory risks 

Restrictions may be imposed by the authorities. The issuer may freeze an address at the request of a regulatory authority. 

Comparison of USDC and USDT

Both tokens are dollar-pegged stablecoins. Their key difference lies in transparency:

• USDC from Circle is backed by reserves in reliable banks, undergoes timely audits, and cooperates with regulators. 
• Tether has long been criticized for its lack of transparency regarding USDT reserves, but its reports are now publicly available. It also often faces complaints from the authorities.

As a result, in the USDC vs USDT standoff, Circle's stablecoin is considered more reliable, while Tether's token is more popular. In June 2025, the capitalization of USDT was $155.2 billion, compared to $60.9 billion for USDC.

Where to Buy and Store USDC? 

Tokens can be purchased on exchanges, P2P platforms, and through online exchanges. ObmenAT24 allows you to buy USDC (ERC20) for cash on favorable terms.   

There are no difficulties with storing tokens, as they are supported by most crypto wallets, including MetaMask and Trust Wallet. 

The Future of USDC: Development Prospects and Key Trends 

In June 2025, Circle went public, offering its shares for sale on the stock exchange. On the first day, their price soared by almost 170%. This signaled growing confidence in USDC, especially among institutional investors.

Tighter regulation of stablecoins in the US also plays in Circle's favor. Thanks to its transparency, demand for USDC will continue to grow.  

Conclusion 

USDC is an example of how the stability of traditional currency can be combined with the capabilities of blockchain. It has already become an important tool for traders, investors, and DeFi users. And with growing trust and transparency, its role in the crypto world will only strengthen. 

Looking for where to exchange crypto in Lviv?
With ObmenAT24, you can withdraw digital money in cash at a favorable rate anonymously and securely. Applications are accepted only through our website.