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Home web3.0 What is the stablecoin USDC? How does stablecoins work? Why are stablecoins so popular in 2025?

What is the stablecoin USDC? How does stablecoins work? Why are stablecoins so popular in 2025?

Jul 16, 2025 am 08:06 AM
Blockchain tool Bitcoin cryptocurrency Blockchain technology Stablize the difference exchange Stablecoin investment Stablecoin purchase app Mainstream stablecoins Stablecoin usdc

The core reasons why USDC becomes the focus of the market in 2025 include: 1. Leading regulatory compliance. Circle actively embraces supervision and holds a variety of international payment licenses, making it the first choice for traditional institutions to enter the crypto field; 2. Application scenarios have expanded from transaction tools to cross-border payments, corporate settlement and other fields, with high efficiency and low cost advantages; 3. As the cornerstone asset of the DeFi ecosystem, it is widely used for lending, pledge and liquidity provision; 4. Adopted by traditional financial giants such as Visa and Mastercard, promoting them to become an important part of future financial infrastructure.

What is the stablecoin USDC? How does stablecoins work? Why are stablecoins so popular in 2025? - php Chinese

What exactly is USDC stablecoin

USDC, full name USD Coin, is a digital stablecoin anchored to the US dollar 1:1. Simply put, you can think of a USDC as a "digital dollar" that exists on the blockchain. Its core value lies in "stability", aiming to solve the pain points of violent fluctuations in cryptocurrencies such as Bitcoin, and provide a reliable store of value and transaction medium for the digital world.

USDC is issued and managed by Circle, a world-leading fintech company, and launched in partnership with the renowned cryptocurrency exchange Coinbase. It is not only a tool for traders, but also a key bridge connecting traditional finance and crypto economy, allowing the value of the US dollar to circulate on the global blockchain network in an efficient and low-cost way.

USDC operating mechanism

The stability and credibility of USDC are mainly based on the following three pillars, which is also the fundamental difference between it and other algorithmic stablecoins.

1. Real asset reserves
This is the core of USDC's operation. For each USDC issued, its issuer Circle deposits real-world assets of equivalent value in its official reserves. These reserves are mainly composed of cash and short-term U.S. Treasuries, deposited in regulated U.S. financial institutions. This full reserve model ensures that every USDC has real dollar value as support.

2. High transparency and audit
In order to build user trust, Circle will regularly hire the world's top accounting firms (such as Deloitte) to conduct independent audits of their reserves and publicly publish monthly reserve certificate reports. Users can check these reports at any time to verify whether the USDC's reserves are true and ensure their transparency.

3. Convenient issuance and redemption
Institutional users can deposit US dollars into Circle's bank account through a compliant process, and Circle will "cast" or issue an equivalent amount of USDC on the blockchain accordingly. On the contrary, the user can also exchange USDCs back to USD. At this time, Circle will "destroy" these USDCs and return the equal amount of USD to the user. This closed-loop process ensures a 1:1 exchange relationship between USDC and US dollar.

What is the stablecoin USDC? How does stablecoins work? Why are stablecoins so popular in 2025? - php Chinese

Why USDC attracts much attention in 2025

1. Leading regulatory compliance
In the context of increasingly strict global regulation of digital assets, USDC has actively embraced regulation since its inception. Its issuing entity, Circle, has payment and currency transfer licenses from many countries and actively cooperates with the requirements of regulatory agencies. This "compliance-first" strategy makes it the first choice for traditional financial institutions and enterprise users to enter the crypto field, and is regarded as one of the safest and most reliable options.

2. Evolution from transaction tools to payment networks
USDC's application scenarios have long surpassed cryptocurrency exchanges. It is being increasingly used in areas such as cross-border payments, international remittances, corporate settlements and online consumption. Compared to the days of wire transfers in traditional banks and high handling fees, using USDC for global transfers is almost instant and extremely low, making it a powerful force to subvert traditional payment networks.

3. The cornerstone assets of the DeFi ecosystem
In the world of decentralized finance (DeFi), USDC is an indispensable cornerstone. Whether it is lending, pledging mines or providing liquidity, USDC has become the first choice asset for its stability and high liquidity. With the continuous maturity and innovation of the DeFi protocol, the demand for USDC has also risen.

4. Adoption of traditional financial giants
Payment giants such as Visa and Mastercard, as well as Wall Street's top investment banks are actively exploring or have begun to integrate USDC for settlement networks and asset tokenization businesses. The endorsement of traditional finance has greatly enhanced the credibility and application prospects of USDC, indicating that it will become an important part of future financial infrastructure.

Final summary and prospect

All in all, USDC has successfully stood out among a host of stablecoins with its core advantages of fully collateral, highly transparent and embracing regulation . It not only connects the real world dollar with the digital world, but also shows huge application potential in the fields of payments, finance and business.

Looking ahead, with the popularization of blockchain technology and the clarity of regulatory frameworks, USDC's role will transform from a "stabilizer" in an encryption circle to a "digital dollar" standard for the global new generation of financial system. For any individual and business looking to understand or participate in the digital economy, understanding the value and how USDC works is undoubtedly a critical step towards the future.

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