What Is USD Coin (USDC): A Fiat-Backed Stablecoin?

By Bernard Ekal
9 Min Read

USD coin commonly referred to as USDC is a cryptocurrency that is pegged to fiat currency and a decentralized digital asset that functions on Blockchain technology. USD Coin is a stablecoin, stablecoin is any digital currency that is pegged to fiat money or any other commodity like Gold and Silver. USD Coin is a stablecoin that is pegged to the U.S. Dollar. This means that its ratio to the U.S. Dollars is 1-to-1. 

USDC is a digital stablecoin that is fiat-backed by the USD to stablelize its market value against volatility. Cryptocurrency is known for its high market volatility, therefore, stablecoins like USDC and USDT are fiat-backed to retain their value. USD Coin, however, is a presentation of fiat currency that takes advantage of the fluctuating cryptocurrency and the benefit of Blockchain technology.

USD Coin are an alternative currency in the market of crypto, they provide investors and individuals an option due to the high volatility of known crypto like Bitcoin (BTC). USDC stablecoin ensures transactions in Blockchain are suitable. We can state that USDC is a form of cryptocurrency whose value is pegged to fiat money to retain its value due to high market Volatility. But, what is USD Coin and what is its importance in the market? 

USDT, USD Coin, and BUSD differ in the Cryptocurrency space. Individuals can check on this article to understand the difference.

What is USD Coins (USDC)

USD Coins (USDC) are cryptocurrencies that are backed by the U.S. dollar or Treasury Security. These coins are stablecoins that are pegged to the U.S. and maintain a ratio of 1:1. USD Coin were brought to financial life in 2018 by the Boston-Based Circle and CoinBase. Its value was pegged to the USD, this means that in each 1 USD Coin in circulation, 1 U.S. dollar is reserved. This therefore tokenizes the U.S dollar and makes it seamless to be utilized in the Blockchain Network. 

USD Coin is tied to fiat currency, in the case of the U.S dollar, to offer a sense of security to the stablecoin, since it is tied to a currency that is worldly accepted and circulated. Although USD Coin is among the cryptocurrencies it cannot be minted like any other cryptocurrency such as Bitcoin and Ethereum, USDC is available as an ERC-20 token which is highly accepted in the Blockchain technology. This ensures that the digital coin is interoperable with the rest of the decentralized applications which are Ethereum-based applications. However, USDC stablecoins are compatible with Blockchains such as Solana, Stella, Tron and Hedera. 

Ever since USD Coin was brought to the financial industry, it has played a major role in the market of cryptocurrency. It has established itself as the second largest stablecoin after the USDT, it ensures that liquidity is provided in both decentralized and centralized exchanges worldwide. 

To understand more about how stablecoins work, we recommend reading our article on Stablecoins: What Is a Stablecoin? Discover Various Types & How They Work.

Essentials Of USDC In The Crypto Exchanges

There are various importance that USD Coin poses in the exchanges and crypto market, its essential allows investors and individuals in the market to minimize losses and maximize profits. So, what are some of the importance of USD Coin? 

Stability Against Volatility

Cryptocurrency is widely known for its volatility, but USD Coin is an alternative to the known cryptocurrency. USDC ensures stability for investors and individuals during the peak volatility time in the market. During High volatility, investors can strategically purchase USDC to stabilize their portfolio. Additionally, USD Coin is tied to the U.S. dollar, it ensures stability and security to investors and individual portfolios. 

Transaction Speed

Unlike fiat currency where transactions are required to pass through certain bank procedures, USD Coin ensures seamless border transactions. Currently, the decentralized nature of Blockchain has benefited international business. USDC stablecoin ensures that transactions from one place to another are cost-effective, additionally, it takes less time for transactions to be complete. Through Blockchain technology, transactions are made easier, individuals do not require third parties like bank institutions. Moreover, it enables individuals to deal with the other party. 

Cryptocurrencies are volatile, to understand more about volatility and how it affects cryptocurrency we recommend this article.


Stablecoins like USD Coin and USDT are secured, they are backed up by fiat currency, which give individuals and investors security during high time of volatility. Stablecoins ensures that investors who trade cryptocurrency using USDC or USDT as the pair are secured. Additionally, USD Coin is backed up by the U.S. dollar, which is worldly acceptable. Moreover, the USD Coin is centralized, which means that it follows the regulatory rules issued by the SEC. it guarantees individuals’ and investors’ legality and trustworthiness by following financial regulations. Exercising the legal rules of the SEC provides a layer of security to investors and individuals who are involved with USD Coin in daily transactions. 

Free From Hacks And Thefts

As stated above, USD Coin is not decentralized, it operates under finance regulations which are issued by the SEC in the United States. This discourages individuals from malicious activities in exchanges. For instance, if the SEC issues a regulation order against an individual operating as a USDC holder, his/her account is frozen. This ensures that malicious activities are discouraged in the exchanges. 

USDT is another type of stablecoin that is dominating the Blockchain currently, we recommend this article to understand USDT better.

Purchasing USD Coin

USD Coin can be purchased in various exchanges, for instance, CoinBase. Other exchanges support the buying and selling of USDC, for example, Gemini, Binance and Kraken. So how do individuals purchase USDC in Binance? 

Create a Binance account

Binance is a centralized exchange, here individuals can buy and sell various crypto, USDC being one of them. By creating a Binance account individuals can buy and sell USDC.

Choosing how to buy USDC

Binance support various ways to purchase crypto, you can purchase USDC by either Credit cards, Bank deposit or Third-party payment. 

Buying USDC

On the toolbar, search USDC, then on the P2P trade section you can purchase the stablecoin.

Check payment details and fees

Binance allows you to check transaction fees by confirming your order and the current price of USDC. 

Storing your USDC

After purchasing USDC you will store your stablecoin in your crypto wallet or you just hold them on a Binance account. 


USDC are stablecoins which are pegged to the U.S. dollar, they are alternatives to cryptocurrencies such as Bitcoin and Ethereum. It allows investors and individuals to do their trading activities offering security during the volatility period. USDC are stablecoin, and stablecoin is cryptocurrency. Crypto is subjected to high market risk and price volatility, therefore, individuals should take deeper precautions while trading cryptocurrencies. 

Avatar photo
By Bernard Ekal Blockchain writer
I'm Bernard Ekal a crypto enthusiast and technical writer. I mainly write news on Blockchain technology and cryptocurrencies. I create informative articles that bring solutions to readers. I create engaging articles, educative and well crafted which enhance readers knowledge in crypto and Blockchain technology.