S&P Global Ratings has reaffirmed USDC at 2 (strong), maintaining the stablecoin’s position in its second‑highest tier.
S&P’s assessment, published on 18 December, evaluates USDC’s ability to maintain its peg to the US dollar. The methodology begins with an asset‑quality review before incorporating governance, regulatory clarity, liquidity, technology dependencies and track record.
S&P kept USDC’s asset assessment at 1 (very strong), citing full backing by low‑risk assets held primarily in the SEC‑registered Circle Reserve Fund (CRF), managed by BlackRock. As of 31 October 2025, reserves totalled $75.88bn against $75.81bn USDC in circulation. The audited reserve mix showed 35% in US Treasuries, 53% in repurchase agreements and 12% in cash. Around 13% of total assets — roughly $9bn — were held as cash outside the CRF at regulated financial institutions, almost all identified as highly rated Global Systemically Important Banks. S&P said this positioning is primarily for liquidity management.
However, despite the strength of the reserve pool, S&P applied a negative adjustment, leaving the overall assessment at 2 (strong). The agency said there is still no clear legal precedent proving that USDC’s reserves would be ring‑fenced if Circle went bankrupt — a key requirement for the top tier. Circle reports that reserves are segregated from corporate assets and protected under state money‑transmission laws, including section 651 of the New York Banking Law, but S&P said uncertainty remains until case law or statutory clarity is established.
S&P noted that the GENIUS Act, due to be implemented in the US by 2027, would explicitly prioritise stablecoin holders in a bankruptcy. Compliance with the Act, alongside Circle’s conditional approval to establish a national trust bank, could strengthen regulatory clarity and support an upgrade. The agency also pointed to Circle’s monthly attestation regime, reviewed by Deloitte & Touche LLP, and the firm’s publication of reserve data with higher‑frequency updates. BlackRock provides daily information on the CRF.
Circle is registered with the US Treasury’s Financial Crimes Enforcement Network and regulated as an Electronic Money Institution by the UK Financial Conduct Authority. It is also fully compliant with the EU’s Markets in Crypto‑Assets Regulation, with Circle France set to mint USDC and required to hold 60% of reserves for EU‑issued tokens in EU bank accounts.
S&P said USDC’s secondary‑market liquidity remains strong across centralised and decentralised exchanges. Direct redemption is limited to Circle partners and institutional users, while retail users must redeem through secondary channels or Coinbase. The agency added that operational and smart‑contract risks are well managed, with audits conducted on both USDC’s core contract and Circle’s Cross‑Chain Transfer Protocol. USDC’s peg has remained stable, supported by a market capitalisation of around $78bn.
S&P reiterated that the Stablecoin Stability Assessment is not a credit rating, does not guarantee price stability and is based primarily on publicly available information. The report was produced independently, though with input from Circle.
