S&P Global Ratings has reaffirmed its strong assessment of USDC, one of the world’s largest U.S. dollar-pegged stablecoins, confirming its ability to maintain parity with the dollar despite ongoing regulatory and structural scrutiny in the global stablecoin market.
In its latest Stablecoin Stability Assessment published on December 18, 2025, S&P Global assigned USDC a stability score of 2 (Strong), while confirming an asset assessment of 1 (Very Strong). The evaluation reflects USDC’s robust reserve backing, transparent reporting, and growing regulatory alignment, while also highlighting remaining legal uncertainties around bankruptcy protection.
USDC is issued by Circle Internet Financial LLC (NYSE: CRCL), a U.S.-based fintech company that has become a central player in institutional-grade digital dollar infrastructure.
USDC Reserves Fully Backed by Low-Risk Assets
According to S&P Global Ratings, USDC benefits from full backing by high-quality, low-risk assets, primarily short-term U.S. Treasuries, repurchase agreements, and cash deposits.
As of October 31, 2025:
$75.88 billion in reserve assets backed $75.81 billion USDC in circulation
35% of reserves were held in U.S. Treasury securities
53% in repurchase agreements
12% in cash holdings
The majority of reserves are held within the SEC-registered Circle Reserve Fund (CRF), managed by BlackRock. Cash balances are primarily custodied at the Bank of New York Mellon, while an additional portion of liquidity is distributed across highly rated global systemically important banks (GSIBs) to support redemptions and issuance.
S&P notes that reserve assets have very short maturities, with a weighted average maturity of roughly ten days, significantly reducing market and liquidity risk.
Why the Stability Assessment Remains at “Strong” and Not “Very Strong”
Despite the strength of USDC’s reserve composition, S&P Global applied a one-level negative adjustment to the overall stability score, keeping USDC at 2 (Strong) rather than upgrading it to the highest tier.
The main reason cited is insufficient legal precedent regarding bankruptcy remoteness. While Circle states that USDC reserves are segregated from corporate assets and protected under U.S. state money transmission laws, S&P highlights that courts have not yet fully tested these protections in an insolvency scenario.
This legal uncertainty, rather than asset quality, remains the key constraint preventing a higher stability score.
Regulatory Progress Could Lead to a Future Upgrade
S&P Global notes that USDC’s stability assessment could improve as regulatory clarity continues to evolve.
Circle has already achieved significant milestones:
Registration with the U.S. Financial Crimes Enforcement Network (FinCEN)
Compliance with the EU’s Markets in Crypto-Assets Regulation (MiCA)
Recognition by the Dubai Financial Services Authority
Conditional approval from the U.S. Office of the Comptroller of the Currency (OCC) to establish a national trust bank
In addition, the upcoming implementation of the GENIUS Act in the United States could materially strengthen legal protections for stablecoin holders by explicitly prioritizing them in bankruptcy proceedings.
If these frameworks are fully implemented and reserve quality remains unchanged, S&P indicates that USDC’s stability score could be upgraded in the future.
Strong Liquidity, Broad Blockchain Presence, and Solid Track Record
S&P also highlighted USDC’s strong liquidity profile, both on centralized and decentralized exchanges, as well as its extensive blockchain support. USDC is currently live on more than 30 blockchains, with the majority of supply concentrated on Ethereum.
The stablecoin has maintained a consistent peg throughout market stress events and currently ranks as the second-largest stablecoin globally, with a market capitalization close to $78 billion.
Smart contracts related to USDC and its cross-chain transfer protocol have undergone independent audits, and Circle continues to operate an active vulnerability disclosure program to mitigate cybersecurity risks.
What This Means for the Stablecoin Market
S&P Global’s latest assessment reinforces USDC’s position as one of the most institutionally credible stablecoins in the market today. While regulatory and legal clarity remains a key variable, the combination of transparent reserves, conservative asset management, and expanding regulatory compliance places USDC among the strongest dollar-backed digital assets currently available.
For institutional investors, exchanges, and payment providers, the report signals continued confidence in USDC’s structural resilience, even as global regulators tighten oversight across the stablecoin sector.
