Burn
Permanently destroying cryptocurrency tokens, removing them from circulation forever.
In the USDC system, burning happens during redemption. When someone redeems USDC for dollars, the tokens are burned (destroyed). This reduces the circulating supply and keeps it in sync with reserves.
Burning is also used by CCTP for cross-chain transfers. USDC is burned on the source chain and minted on the destination chain, keeping the total supply constant across all chains.
Some other crypto projects burn tokens to create scarcity (like Ethereum's EIP-1559 burns a portion of gas fees). For USDC, burning is purely a supply management mechanism, not a scarcity play.
Related Terms
Mint
The process of creating new stablecoin tokens by depositing an equivalent amount of fiat currency.
Redeem
The process of exchanging stablecoin tokens for their underlying fiat currency value, effectively burning the tokens.
CCTP (Cross-Chain Transfer Protocol)
A protocol that enables native USDC transfers between blockchains by burning tokens on one chain and minting them on another.
Circulating Supply
The total number of tokens currently in circulation and available on the market.
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This definition is provided for educational purposes. USDC.org is an independent resource and is not affiliated with Circle Internet Financial.