USDC (USD Coin) has established itself as the second most widely used stablecoin globally. Backed by highly liquid assets and audited regularly, this stablecoin supports regulatory compliance and provides greater peace of mind to its users. However, several myths surrounding this stablecoin persist. Below, we address the most common myths about USDC.
It Doesn’t Have the Same Backing as Other Stablecoins
Some people think that USDC lacks solid backing because it isn’t the stablecoin with the largest market capitalization. However, each unit of USDC in circulation is backed by one US dollar or equivalent highly liquid assets, such as cash deposits and US Treasury bills, held in segregated accounts within regulated financial institutions.
In addition, the composition of USDC’s reserves is verified by Deloitte, an auditing firm that publishes monthly reports. This level of scrutiny is uncommon in the crypto ecosystem and provides an additional guarantee for businesses that need a degree of certainty about the liquidity of their funds.
USDC only works on the Ethereum network
During its early years, USDC was primarily associated with the Ethereum network, leading many users to believe it was the only available chain. Currently, USDC operates on more than fifteen blockchains, including Tron, Solana, Polygon, Avalanche, and Base, allowing users to choose their preferred network based on transaction fees and confirmation speed.
For businesses already making USDT payments on the Tron network, this compatibility represents an operational advantage, as they don’t need to modify their existing infrastructure to start using USDC, expanding payment options and reducing dependence on a single stablecoin provider.
Centralized and without external controls
The fact that USDC is issued by a private company like Circle has created the perception that it operates without external controls. However, Circle is subject to US financial regulations, is listed on the New York Stock Exchange, and publishes monthly audit reports detailing the composition of its reserves.
This exposure to public scrutiny gives USDC a level of transparency rarely found in other digital financial instruments, as companies accountable to boards of directors or investors have verifiable reports, simplifying internal and external audit processes.
USDC is designed only for the US market
Some people think that USDC is designed only for the US market. While Circle is a US-based company, USDC was conceived as a stablecoin with global reach. Its integration with exchanges, payment gateways, and decentralized finance protocols has made it a tool used across the world, particularly in Latin America, Europe, and Asia, for international payments.
It is important to note that in countries such as Mexico, Brazil, and Argentina, companies operating with cryptocurrencies have begun incorporating USDC as an alternative, primarily to diversify their resources and offer their counterparties an option that meets internationally recognized auditing standards.
Low Liquidity Compared to Other Stablecoins
USDC’s liquidity is often underestimated. With a market capitalization exceeding $50 billion, USDC is the second-largest stablecoin by volume (behind only USDT). USDC’s presence on both centralized and decentralized exchanges guarantees conversion operations with narrow spreads.
For Latin American companies making recurring payments to overseas suppliers, this liquidity is a decisive factor, as it allows for transactions of varying amounts without being affected by exchange rate fluctuations. The depth of the USDC market ensures that funds can be converted to fiat currency quickly and efficiently.
It’s only useful for traders and investors
Some people exclusively associate USDC with cryptocurrency trading, ignoring its usefulness in the corporate world. However, the reality is that USDC is increasingly used to pay international invoices, process payroll abroad, and manage corporate treasury, thanks to its stability, regulatory compliance, and predictable value.
For example, a company that needs to pay a supplier in Asia can send USDC in a matter of minutes, at lower fees than traditional bank transfers. Knowing the main differences between stablecoins like USDT and USDC, many organizations choose USDC because of its audit frequency and the quality of the assets backing each token.
It could disappear if Circle faces financial problems
A recurring concern is that if a crisis occurs at the issuing company (Circle), the tokens in circulation could become worthless. However, the reserves backing USDC are held in segregated accounts and are not part of Circle’s operating balance sheet. Therefore, even in an adverse scenario for the company, the funds remain the property of the holders.
This asset protection design is audited monthly by Deloitte, providing an independent layer of verification. For companies using USDC as part of their international payments strategy, this structure represents an important safeguard against the operational risks of the issuing company.
What are your thoughts on this topic? Do you know of any other myths about USDC?
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