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USDC is a dollar-pegged stablecoin issued by Circle Internet Financial, a US-regulated fintech company. Launched in 2018 as a joint venture between Circle and Coinbase (through the Centre Consortium), USDC was designed from the start with regulatory compliance and reserve transparency as core features. It is the second-largest stablecoin by market capitalisation, behind Tether (USDT).
Each USDC token is intended to represent one US dollar, backed by reserves held in segregated accounts and invested primarily in short-dated US Treasury securities and cash. Circle publishes monthly attestation reports prepared by a major accounting firm, providing independent verification of the reserve backing. USDC is available on multiple blockchain networks including Ethereum, Solana, Base, Arbitrum, and Polygon. In Australia, individuals can purchase USDC using AUD through PayID transfers on AUSTRAC-registered platforms like Swyftx.
USDC to AUD
The live USDC/AUD rate is shown above. Like USDT, the AUD price of USDC is primarily a reflection of the AUD/USD foreign exchange rate rather than cryptocurrency market dynamics. When the Australian dollar weakens against the US dollar, the AUD price of USDC rises, and vice versa.
Some participants hold USDC as a means to maintain dollar-denominated value within a digital asset portfolio. Others use it as a settlement currency for DeFi transactions, as a base pair for trading, or for cross-border transfers.
How USDC differs from USDT
Both USDC and USDT aim to maintain a 1:1 peg with the US dollar, but they differ in how they achieve and demonstrate that peg.
Circle, the issuer of USDC, is a licensed money transmitter in the United States and operates under regulatory frameworks in multiple jurisdictions. Its reserve reports are prepared monthly by an independent accounting firm.
In practice, both stablecoins have a strong history of maintaining their pegs – although this does not mean they are without de-pegging risk. The choice between them often comes down to the specific blockchain network a user needs (USDT dominates on Tron; USDC has strong presence on Ethereum, Solana, and Base), the DeFi protocols being used, and individual preferences around issuer transparency.
| Feature | USDC (Circle) | USDT (Tether) |
| Issuer | Circle Internet Financial | Tether Limited |
| Reserve reporting | Monthly third-party audited reports | Periodic attestation reports |
| Primary networks | Ethereum, Solana, Base | Ethereum, Tron, Solana |
| Market position | Second-largest stablecoin | Largest stablecoin globally |
| Regulatory approach | US-regulated, state money transmitter licences | Registered in multiple jurisdictions |
Where USDC is used
USDC's adoption is concentrated in two areas that distinguish it from USDT's use-case profile.
In decentralised finance (DeFi), USDC is widely used as collateral in lending protocols, as a base pair on decentralised exchanges, and as the settlement currency for on-chain derivatives and structured products. Its monthly audited reserves make it a viable stablecoin for protocols that need to demonstrate reserve transparency to their own users or regulators.
In institutional and corporate treasury, USDC has been adopted by companies and payment providers that require a stablecoin with a clear regulatory status. Circle's partnerships with traditional payment rails, including Visa settlement integration, have positioned USDC as a bridge between traditional finance and on-chain settlement.
How USDC maintains its peg
USDC's dollar peg is maintained through full reserve backing and a mint-and-redeem mechanism. Circle holds reserves equal to the total USDC in circulation, invested primarily in short-dated US Treasury securities and cash held at regulated financial institutions. These reserves are verified monthly by an independent accounting firm.
When demand for USDC increases, new tokens are minted by Circle upon receipt of corresponding US dollar deposits. When holders want to redeem, they return USDC to Circle and receive US dollars. This direct mint-and-redeem mechanism, combined with open market arbitrage, keeps the price close to $1.00.
USDC briefly deviated from its peg in March 2023 when Circle disclosed exposure to Silicon Valley Bank, where a portion of its reserves were held. The peg recovered fully once US regulators confirmed depositor protection. The episode highlighted both the risk of bank exposure in reserve management and Circle's disclosure process.
