Key takeaways
- USDC is a stablecoin issued by the US company Circle. One USDC is always meant to be worth one US dollar.
- Against every USDC, Circle holds cash and short-term US government bonds, and an independent accounting firm checks the reserve every month.
- In the EEA, USDC is an e-money token under MiCA. In March 2023 its price briefly fell to 86 cents when a bank holding part of the reserve failed.
- USDC is the base currency of Myntkaup accounts. Krónur are converted to USDC when you deposit, and USDC to krónur when you withdraw.
Contents
USDC (USD Coin) is a StablecoinStablecoinA cryptocurrency designed to keep a steady price, usually by tracking the US dollar or another currency. issued by the US company Circle that is always meant to be worth one US dollar. Against every USDC, Circle holds assets in dollars, mainly cash and short-term US government bonds, and businesses can swap USDC back into dollars one for one.
USDC is one of the two largest stablecoins in the world and the base currency of Myntkaup accounts. If stablecoins are new to you, start with What are stablecoins? This article looks at USDC itself in more detail.
Who issues USDC?
Circle is a US fintech company. It launched USDC in 2018 together with the crypto exchange Coinbase, through a joint body called Centre. In August 2023 Centre was wound up, and since then Circle alone has run the issuance and governance of USDC. Circle's shares have been listed on the New York Stock Exchange since June 2025.
In Europe, USDC is issued by Circle's subsidiary in Paris. It holds an e-money institution licence from the French regulator ACPR and has issued USDC under MiCAMiCAThe EU regulation on markets in crypto-assets, in force in Iceland since 1 January 2026, which sets the same rules for crypto services across the EEA. since 1 July 2024. Under MiCA, USDC is an e-money tokenE-money token (EMT)A stablecoin that tracks a single official currency, such as the dollar or the euro. Under MiCA, only banks and e-money institutions may issue one., a stablecoin that tracks a single official currency. E-money tokens come with strict rules, for example on reserves and on redemption at par value.
In the United States, a dedicated stablecoin law, the GENIUS Act, was signed in July 2025. It sets rules on reserves and supervision for issuers such as Circle.
What is USDC used for?
USDC is in effect a digital dollar that can be sent on a BlockchainBlockchainA public ledger where transactions are grouped into blocks, each linked to the one before, so past records can't be altered without it showing. anywhere, at any time of day. Circle issues USDC on dozens of networksBlockchain networkThe blockchain a cryptocurrency or token is recorded and sent on, such as the Bitcoin network or the Ethereum network., such as Ethereum and Solana. Its main uses are:
- Trading crypto. Crypto exchanges use USDC as a stable unit for buying and selling other cryptocurrencies and for holding funds between trades.
- Payments and transfers. Businesses and individuals use USDC to send dollars across borders. A transfer often takes only seconds or minutes, at weekends too.
- DeFi. USDC is widely used in DeFiDeFi (decentralised finance)Financial services, such as lending, saving and trading, that run on smart contracts on a blockchain instead of through a bank or other middleman., financial services that run on smart contractsSmart contractA program that runs on a blockchain and automatically carries out what it was written to do once certain conditions are met. without middlemen. There it is used, for example, as CollateralCollateralAn asset pledged as security for a loan. In DeFi, the collateral usually has to be worth more than the loan. for loans or placed in funds called liquidity poolsLiquidity poolA shared pot of tokens held in a smart contract, which people trade against on decentralised exchanges. Those who fund it earn a share of the fees. that let people swap between tokens.
How does USDC work?
Issuance and redemption
When a business deposits dollars with Circle, Circle creates the same number of new USDC. When a business hands USDC back, the coins are destroyed and the dollars paid out. That way the number of USDC in circulation should always match the assets in the reserve.
Individuals don't usually deal with Circle directly, because its redemption service is only open to businesses and institutions. Instead, they buy and sell USDC through crypto exchangesCrypto exchangeA company or platform where you buy, sell and swap crypto, for example with krónur..
Think of a cloakroom ticket. The ticket itself is just paper, but it entitles you to a coat that someone else is looking after. USDC is only as trustworthy as the cloakroom: the assets and the company that holds them.
The reserve
Most of the reserve is held in the Circle Reserve Fund, a money market fund registered with the US Securities and Exchange Commission (SEC) and managed by the asset manager BlackRock. The fund holds mainly short-term US government bonds and cash. The rest of the reserve is cash in bank accounts, mostly at large banks.
Circle publishes the make-up of the reserve on its website. One of the world's four largest accounting firms checks the reserve every month, and its reports are published.
March 2023: when USDC lost its peg
On Friday 10 March 2023, the US bank Silicon Valley Bank failed. USD 3.3 billion of USDC's reserve, about 8% of the total, was stuck there. Over the weekend, redemptions at Circle largely stopped, and the market price of USDC fell to 86 cents.
On the evening of Sunday 12 March, the US Treasury, the Federal Reserve and the deposit insurer FDIC announced that the bank's depositors would get all their money back. The price recovered straight away, and on Monday 13 March USDC was back at one dollar as Circle resumed redemptions. Through to Wednesday, Circle redeemed USD 3.8 billion of USDC.
The lesson is that the reserve was there, but part of it was temporarily out of reach. Even a well-backed stablecoin depends on the banks that hold its assets.
What are the risks?
USDC doesn't swing in price like bitcoin, but it isn't risk-free:
- Issuer risk. USDC is a claim on Circle, not a bank deposit, and no deposit insurance covers it.
- The peg can break. Circle doesn't guarantee that one USDC will always be valued at one dollar on every trading platform. In March 2023 the price briefly fell to 86 cents.
- Circle can freeze USDC. Circle reserves the right to block specific wallet addressesWallet addressA string of letters and numbers you give out to receive crypto, much like a bank account number., for example at the request of the authorities, and to freeze the USDC held there. In 2022, for example, Circle froze USDC at addresses linked to Tornado Cash, a service the US government had then placed under sanctions. This is a fundamental difference between USDC and bitcoin, because nobody can freeze bitcoin held in Self-custodySelf-custodyHolding the private keys to your crypto in your own wallet, so nobody else controls it but all the responsibility for the keys is yours..
USDC at Myntkaup
USDC is the base currency of Myntkaup accounts. This is how it works:
- You transfer krónur from your bank account. They are converted automatically to USDC at Arion Bank's general selling rate for US dollars, with no added spread. At weekends and on public holidays, the rate from the last banking day is used.
- You buy crypto with USDC, and when you sell crypto you receive USDC. You can keep it, use it to buy again or withdraw it.
- When you withdraw to an Icelandic bank account, USDC is converted to krónur at Arion Bank's general buying rate, with no added spread.
USDC can't be deposited or withdrawn on-chain at Myntkaup. You can find the fees on the fees page and the USDC rate in krónur on the USDC price page.
Keep in mind that USDC is stable in dollars, not in krónur. While you hold USDC, its value in krónur moves with the dollar exchange rate.
Frequently asked questions
Is USDC the same as a dollar?
Not quite. One USDC is meant to be worth one dollar, and Circle holds assets in dollars against every USDC. But USDC is a claim on a private company, not a note from the US Federal Reserve or a bank deposit, and no deposit insurance covers it. On the market its price can also drift away from one dollar, as it did in March 2023.
What is the difference between USDC and USDT?
Both are stablecoins that track the dollar, and USDT, issued by the company Tether, was the larger of the two in October 2026. The differences lie mainly in the issuer and the rules:
- Reserves. USDC's reserve is held in cash and short-term US government bonds. Tether also holds a lot of such bonds, but part of its reserve is in gold and bitcoin, which change in price.
- Reporting. Circle publishes a check of its reserve every month, Tether every quarter.
- MiCA. USDC is issued as an e-money token under MiCA. Tether is not on the European Securities and Markets Authority's (ESMA) register of e-money token issuers.
Closing thoughts
USDC is a digital dollar issued by Circle and backed by cash and short-term US government bonds. It is one of the most widely used stablecoins in the world, in trading, payments and DeFi, and in the EEA it falls under MiCA's strict rules for e-money tokens.
Remember that USDC tracks the dollar, not the króna, so its value in krónur moves with the dollar exchange rate. Read more about MiCA and what it means for you.
