USD Coin (USDC) has grown to play an essential role in the Ethereum ecosystem among decentralized applications (dApps) and decentralized finance (DeFi) protocols. It brings more secure, stable value exchange to trading and transacting within the Ethereum community.
USDC is a digital asset available to businesses through a variety of platforms. While Ethereum has the most USDC in circulation as of March 1st, 2023, USDC is issued on many blockchains that leverage token standards other than ERC20. Whether a business plans to send, spend, or hold USDC, digital asset exchanges provide the simplest and most convenient ways to access Ethereum USDC.
What is USDC ERC20?
USDC ERC20 is the version of USDC that functions on the Ethereum network, and it follows the ERC20 token standard for creating and issuing smart contracts while leveraging the trust and stability of USDC.
A token standard is a set of rules that allows the development of digital currencies and other assets on blockchain protocols1. This standard helps ensure smart contracts remain composable, which means they can be integrated with other on-chain assets and applications. If a new project issues a token, token standards help ensure that it remains compatible with existing exchanges.
Why Use USDC on Ethereum?
Ethereum is home to one of the largest, most active ecosystems in the digital asset industry. USDC is supported across many leading Ethereum applications.
Things to Remember When Buying USDC ERC20
There are a few things for businesses to consider before purchasing any USDC ERC20:
1. Find a digital asset exchange that supports USDC ERC20
USDC is a multichain asset, which means that it is issued on a number of other blockchains that use token standards other than ERC20.
While Ethereum is the most commonly used blockchain for USDC transactions, make sure that the exchange supplies USDC in the ERC20 token standard. USDC that is native to another blockchain (for example: the SPL token standard for Solana) will not be compatible with Ethereum. Attempting to transfer a non-compatible form of USDC on-chain could result in a loss of funds.
2. Use local fiat currencies or swap crypto for USDC
Acquiring USDC through a crypto exchange can allow businesses to buy USDC directly with local fiat currencies, such as USD. Most exchanges allow for account funding with cash through debit cards, credit cards, and bank account transfers. Refer to each exchange’s website for exact funding guidelines.
Businesses may also be able to swap other digital assets for USDC. If the exchange supports the specific pairing, existing cryptocurrency balances can be exchanged for USDC, rather than depositing more fiat.
3. Take note of exchange fees
Although USDC is always redeemable on a 1:1 basis for U.S. dollars via a Circle Account, which is only an option for eligible businesses and institutions, some exchanges charge fees for purchasing or trading USDC. There may also be subsequent fees when withdrawing USDC to another wallet.
4. If sending USDC ERC20 on-chain, use a compatible wallet
USDC funds that are held in an exchange can typically be transferred to an on-chain, ERC20-compatible wallet to access Ethereum apps.
Exchanges That Support USDC ERC20
Before buying digital assets for the first time on a crypto exchange, businesses will need to follow the necessary account creation, verification, and funding processes. Once those steps are completed, the business will be ready to buy Ethereum USDC.
Coinbase provides more resources for USDC than other exchanges. Coinbase supports USDC for Ethereum (ERC20), and is accessible across these platforms:
Coinbase - The primary cryptocurrency exchange platform, with a simple user interface
Coinbase Wallet - A secure wallet for storing digital assets and exploring decentralized applications
Another American-based cryptocurrency exchange, Kraken, launched support for Ethereum USDC in January of 2020. Along with the main Kraken exchange, USDC is supported on the Kraken Pro iOS app, Kraken Pro Android App, and the Kraken OTC Desk. All digital asset orders submitted on Kraken are subject to trading fees.
KuCoin is a large cryptocurrency trading platform that supports many applicable USDC token standards for deposit and withdrawal, including ERC20.
USDC is integrated with Ethereum’s top DeFi projects
Decentralized finance protocols on Ethereum support digital assets like USDC to maintain stability and familiarity by denominating assets and transactions in dollar terms. USDC can be used on a wide array of DeFi projects on Ethereum, ranging from decentralized exchanges and lending protocols to trustless derivatives trading platforms and yield-generating liquidity pools.
Here are a few dApps on Ethereum that support USDC:
USDC is a popular currency for Ethereum NFTs
Dollar digital currencies such as USDC have quickly become a popular currency used on NFT marketplaces and storefronts. USDC (ERC20) is also supported on OpenSea, one of the world’s largest NFT marketplaces, where it can be used to create listings, make offers, and purchase items. With a digital currency such as USDC, purchases and sales can be made without being subjected to the volatility of other digital assets.
1 Wackerow, Paul. “ERC20 Token Standard”, Ethereum Docs, August 15, 2022, https://ethereum.org/en/developers/docs/standards/tokens/erc-20/, (Last accessed Jan 31, 2023)