USDC basics
USDC (USD Coin) is a stablecoin issued by Circle, a US-based fintech company. Each USDC in circulation is backed 1:1 by reserves held in regulated US financial institutions — primarily cash and short-term US Treasury securities.
Monthly attestation reports by Grant Thornton (a Big Four-adjacent accounting firm) verify that reserves match or exceed the number of tokens in circulation. This level of transparency is USDC's main differentiator from USDT.
USDC vs USDT
- Transparency. USDC publishes monthly reserve attestations. USDT publishes quarterly reports with less detail.
- Regulation. Circle is a US-regulated money transmitter. Tether is domiciled in the British Virgin Islands.
- Volume. USDT has roughly 3-4× more trading volume than USDC. It's the default on most exchanges, especially in Asia.
- DeFi usage. USDC is heavily used in DeFi — many protocols prefer it for its transparency and compliance.
- Freeze capability. Both USDT and USDC can freeze specific addresses. Circle has done this for sanctioned wallets. This is a centralization concern for DeFi users.
The SVB incident
In March 2023, Silicon Valley Bank collapsed — and Circle had $3.3 billion of USDC reserves deposited there. Over a weekend, USDC lost its peg and dropped to $0.87 on some exchanges.
When the US government stepped in to guarantee SVB deposits, USDC quickly returned to $1.00. But the episode was a stark reminder that even well-backed stablecoins carry counterparty risk. Your stablecoin is only as safe as the banks and institutions holding its reserves.
Where USDC is used
- DeFi protocols. Aave, Compound, Curve, and Uniswap all have deep USDC liquidity pools.
- Cross-border payments. USDC on Solana or Arbitrum enables near-instant, near-free dollar transfers globally.
- Trading pairs. Most exchanges offer USDC pairs alongside USDT pairs.
- Institutional adoption. Due to its regulatory compliance, USDC is preferred by institutional investors and fintech companies.
Which chains support USDC?
USDC is natively available on Ethereum, Solana, Avalanche, Arbitrum, Optimism, Base, Polygon, and several others. "Natively" means Circle issues USDC directly on these chains — not through a bridge — which is safer and more efficient.
Getting comfortable with stablecoins
Both USDT and USDC serve the same fundamental purpose: stable value in the crypto ecosystem. On Korvex, you practice with USDT pairs, but the skills transfer directly — understanding how stablecoins function as quote currencies, how they affect your P&L, and why they matter for risk management.