What is USDC?

The problem with most crypto: the price moves

The UK's Financial Conduct Authority (FCA) says that cryptoassets "tend to be very volatile" and that this makes them "unreliable as a payment method".^[7] The same page says the FCA sees potential benefits in cryptoassets "linked to fiat currency" that are "less volatile and more stable".^[7]

That second kind is what a stablecoin tries to be.

What a stablecoin is

A stablecoin is a digital token whose value is tied to something steadier than itself, usually a currency.

MiCA, the EU regulation on crypto-assets, defines an e-money token in Article 3(1)(7) as a crypto-asset that "purports to maintain a stable value by referencing the value of one official currency".^[8] According to Circle's white paper for the EU, read on 23 October 2026, "USDC is an e-money token". The same white paper calls USDC "a digital token pegged to the USD".^[1]

What stands behind a USDC, according to Circle

Circle issues USDC. What follows is what Circle states about it, read on 23 October 2026. Kudu does not issue USDC and does not hold the dollars that back USDC.

• Assets. Circle says USDC is "backed by the equivalent value of US dollar denominated assets", "held as reserves for the benefit of USDC holders".^[2]
• What the assets are made of. Circle says most of them are held in the Circle Reserve Fund, "an SEC-registered 2a-7 government money market fund", and that the remainder is "held in cash, mostly among a handful of the world's largest banks".^[3]
• Kept apart. Circle says these assets are "held separately from Circle's operating funds".^[3]
• Reporting. Circle says the holdings are "fully disclosed on a weekly basis".^[3]
• Checking. Circle says "a Big Four accounting firm provides monthly third-party assurance that the value of USDC reserves are greater than the amount of USDC in circulation".^[3]

What the EU text says about e-money tokens

According to the three EU supervisory authorities (EBA, EIOPA and ESMA), the MiCA provisions "related to issuers of e-money tokens and asset-referenced tokens became applicable on 30 June 2024".^[10] For e-money tokens in general, MiCA says:

• Holders "shall have a claim against the issuers" (Article 49(2)).^[11]
• On request, the issuer "shall redeem it, at any time and at par value" (Article 49(4)).^[11]
• Issuers "shall not grant interest in relation to e-money tokens" (Article 50(1)).^[11]

ESMA, the EU's markets authority, publishes an interim MiCA register, last updated 22 October 2026 when we read it. Its file of e-money token issuers lists Circle Internet Financial Europe SAS, with the French authority ACPR as the authority and a USDC white paper dated 01/07/2024.^[12]

What Circle's redemption policy says

Circle Internet Financial Europe SAS ("Circle France") publishes a redemption policy for the EU, last updated 15 September 2026 and read on 23 October 2026. According to that policy:

• Holders have a right of redemption "at any time and at par value, subject to the conditions set out in the present policy".^[4]
• Circle France redeems USDC "held by Circle Coins Holders established in the EEA". Holders established outside the EEA exercise redemption "with Circle LLC, under its Circle Mint User Agreement".^[4]
• A private person registers through "the form available via the dedicated URL address" on Circle France's webpage. Circle France "shall assess eligibility", then performs "the mandatory verifications of identity". The person must also "provide an IBAN from an EEA Bank Account".^[4]
• A holder who does not meet the requirements "will be denied their Circle Coins redemption request".^[4]
• The policy also says holders may buy and sell USDC through retail exchanges.^[4]

Circle describes its own minting and redeeming service, Circle Mint, as "currently available only to institutions" and "not available to individuals".^[2]

This guide cannot tell you whether you qualify. Circle's checks decide that, and they depend on where you live.

In Kudu, turning USDC into cash goes through MoneyGram. That is a different route from redeeming with Circle. MoneyGram sets and charges its own fee, Kudu also charges a fee, and both are shown before you confirm.

What USDC does not do

1. It is priced in US dollars. If your bills are in euros or CFA francs, what a dollar is worth in your currency changes from day to day. The European Central Bank publishes a euro to dollar reference rate, and it differs from day to day.^[13]
2. Circle says it is not covered by deposit protection. Circle states that digital assets "do not typically have legal tender status and are not covered by deposit protection insurance".^[2]
3. Risks remain. Circle also states that digital assets are "subject to a number of risks, including price volatility".^[2] In October 2025 the three EU supervisory authorities warned consumers that "crypto-assets can be risky and that legal protection, if any, may be limited depending on which crypto-assets they invest in".^[10]
4. The rules are still moving. The Banque de France says that MiCA "only partially addresses the risks posed by changes in the sector", in particular in the event of "widespread adoption of stablecoins issued by non-European players", and that it is pressing "to restrict the use of stablecoins for everyday payments".^[5] On 21 October 2026 the French Treasury, the AMF, the Banque de France and the ACPR published their joint response to the European Commission's consultation on revising MiCA.^[6]

Efua's invoice, step by step

Questions

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