Reserves
The pool of real-world assets (U.S. Treasuries, cash) held to back each USDC token at a 1:1 ratio.
USDC reserves are held in two main places. The majority sits in the BlackRock-managed Circle Reserve Fund, invested in short-dated U.S. Treasury securities and overnight Treasury repurchase agreements. The remainder is cash at systemically important financial institutions.
The reserve composition is designed for safety and liquidity. U.S. Treasuries are the safest financial instruments in the world, and short maturities (under 3 months) mean the funds can be accessed quickly to meet redemptions.
Total reserves consistently exceed total USDC in circulation, providing a small buffer. This surplus comes from the interest earned on Treasury holdings.
Related Terms
Attestation
An independent third-party examination that verifies USDC reserves meet or exceed the amount of USDC in circulation.
USDC (USD Coin)
A regulated, fully-backed stablecoin pegged to the U.S. dollar. Each USDC is redeemable for $1.
Peg
The target price a stablecoin is designed to maintain, typically $1.00 for dollar-pegged stablecoins.
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.
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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.