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Risk Assessment: USDC (Circle)

Based on the Stablecoin Risk Assessment Framework (SRAF)

Analysis Date: 2026-01-03 Assessor: Antigravity (AI Agent)

Scoring Methodology

Each risk factor is scored on a 0-2 scale:

  • 0 = Low Risk: Strong posture, mature controls, high transparency.
  • 1 = Medium Risk: Partial controls, evolving maturity, limited visibility.
  • 2 = High Risk: Significant vulnerabilities, opacity, known weaknesses. Default to 2 if information is missing.

1. Settlement Layer

Assessing the underlying blockchain infrastructure (Ethereum primarily).

Technical Risks

  • Consensus Stability: 0 - Ethereum Proof-of-Stake is highly mature and stable.
  • Finality Guarantees: 0 - 12-15 minute finality, highly reliable.

Governance & Regulatory

  • Validator Centralization: 1 - User concern exists regarding Lido staking dominance, though protocol level is robust.

2. Issuance Layer

Assessing the stablecoin mechanism and issuer.

Technical Risks

  • Smart Contract Risk: 0 - "FiatTokenV2_2" audited by EtherAuthority (May 2024), ChainSecurity. Mature codebase.
  • Mint/Burn Control: 0 - Centralized but transparent. Blacklist function exists but is used for compliance (e.g. OFAC).

Operational Risks

  • Custody Risk (Reserves): 0 - 100% backed by cash and short-dated U.S. treasuries (Circle Reserve Fund - SEC registered). Held at BNY, BlackRock.
  • Audit Frequency: 0 - Monthly attestations by Deloitte.

3. Application Layer

Assessing the integration and ecosystem utility.

Market Risks

  • Liquidity Depth: 0 - Extremely high (~$190B+ historically). Broad integration across CEX and DEX (Uniswap, Curve).
  • Peg Stability: 0 - Historically strong peg maintenance, with rapid recovery from SVB depeg event.

4. User Layer

Assessing end-user accessibility and protection.

Operational Risks

  • Wallet Compatibility: 0 - ERC-20 standard is universally supported.
  • User Experience Friction: 0 - Native support on major exchanges (Coinbase) and wallets.

Summary of Scores

| Layer | Score (Avg) | | :--- | :--- | | Settlement | 0.33 | | Issuance | 0.0 | | Application | 0.0 | | User | 0.0 | | Overall | 0.08 |