CEX (Centralized Exchange)
A cryptocurrency exchange run by a company that holds your funds and matches buy/sell orders. Examples: Coinbase, Kraken, Binance.
CEXs are the most common way people buy and sell crypto. You create an account, verify your identity (KYC), deposit money, and trade. The exchange holds your funds in their custody (like a bank).
Advantages: easier to use, fiat on/offramps built in, customer support, regulated, and insured. Disadvantages: you don't control your keys (counterparty risk), KYC required, and the exchange could freeze your account.
For USDC, CEXs like Coinbase are the simplest way to buy, sell, and cash out. Most people use a CEX for converting between fiat and crypto, and a self-custody wallet for holding larger amounts.
Related Terms
DEX (Decentralized Exchange)
A cryptocurrency exchange that operates through smart contracts, allowing users to trade directly without an intermediary.
KYC (Know Your Customer)
Identity verification requirements that financial services must perform to prevent fraud and money laundering.
Custodial Wallet
A wallet where a third party (like an exchange) holds your private keys on your behalf.
Onramp
A service that lets you convert traditional money (fiat) into cryptocurrency.
Offramp
A service that lets you convert cryptocurrency back into traditional money (fiat).
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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.