What are digital dollars?
What digital dollars are, who issues USDC, and what keeps one worth one dollar.
Your MozaikPay balance is made of digital dollars. This page explains what a digital dollar actually is, where its value comes from, and what keeps one worth one dollar.
A dollar in digital form
A digital dollar is a US dollar in digital form. Behind the scenes it's a currency called USDC, where one unit is always worth approximately one dollar.
What makes it different from the dollars in a bank account is where it lives. A bank balance is an entry in that bank's private ledger, and it moves only when banks agree to move it, on their schedule, through their borders. USDC lives on public networks that no single company runs. That's what lets your digital dollars go to anyone with a wallet, almost instant, at any hour, across any border, without asking a bank's permission.
Your digital dollars sit as USDC in your own wallet on Base, one of those public networks, controlled by keys that only you hold. Is my money safe? covers that side of the story.
Where the value comes from
USDC is issued by Circle, a US company. For every unit of USDC in the world, Circle holds one real dollar in reserve, kept in cash at large banks and in short-term US government debt. Anyone can redeem USDC with Circle, one unit for one dollar, and Circle publishes a report every month, checked by an outside accounting firm, showing that the reserves cover every unit in circulation.
That redemption is what keeps the price pinned. If USDC ever trades below a dollar, traders can buy it cheap and redeem it with Circle for a full dollar, and that buying pushes the price straight back. So the value doesn't rest on people's mood about crypto. It rests on real dollars, sitting in reserve, that every unit can be traded back for.
Not the crypto in the headlines
Digital dollars live on the same kind of network as Bitcoin, so it's natural to worry they'll behave the same way. They don't. Bitcoin's price is whatever people will pay for it today, which is why it can double or halve in a year. USDC belongs to a family called stablecoins, currencies designed to hold one fixed value, with reserves behind them instead of a market mood.
Stability cuts both ways. Digital dollars won't grow the way people hope Bitcoin will, and holding them won't make you rich. They keep your savings worth the same in dollars, and if your local currency keeps losing value, that's the whole point.
Why we chose USDC
Stablecoins aren't all built alike, and we were picky. Some big ones have a history of being vague about what's actually in their reserves. Others promised a stable dollar through financial engineering, with few real dollars behind it, and the largest of those collapsed in 2022 and took tens of billions of people's money with it.
USDC is fully reserved, shows its reserves every month, and is issued by a regulated US company. We think that makes it the safest digital dollar there is, and it's the only currency your MozaikPay wallet holds.
What could go wrong
The real risk of any stablecoin is that the reserves turn out to be worth less than the units in circulation. USDC has been tested on this once. In March 2023, a bank holding part of its reserves failed, and USDC traded below a dollar for a weekend until Circle confirmed the reserves were covered. The price came right back, and nobody who simply held USDC lost anything.
There's one more thing to know. Like every regulated stablecoin, USDC has a legal switch. When a court or law enforcement orders it, Circle can freeze the USDC at a specific address. In practice that's used against sanctioned entities and stolen funds, and it exists precisely because USDC is the regulated kind of digital dollar.