Businesses can open a Circle Account to exchange US dollars for USDC. When a business deposits USD into their Circle Account, Circle issues the equivalent amount of USDC to the business. The process of issuing new USDC is known as “minting”. This process creates new USDC in circulation.
Similarly, when a business wants to exchange their USDC for US dollars, the business can deposit USDC into their Circle Account and request to receive US dollars for free. This process of redeeming USDC is known as “burning”. This process takes USDC out of circulation.
When US dollars are swapped for USDC on a digital asset exchange, the exchange will typically provide the balance of USDC it has on-hand to fulfill the swap. If the exchange needs more USDC to fulfill the swap, the exchange will often use its Circle Account to mint more USDC.