Token approval (allowance)
A token approval (working definition) is an on-chain permission that lets another address, the spender, move tokens from the holder's balance up to an amount called the allowance. In the ERC-20 standard, approve allows the spender to withdraw from the holder's account multiple times up to that amount, and calling it again overwrites the current allowance; allowance returns how much the spender may still withdraw. Circle's USDC contract implements the same approve and allowance functions.
What the sources say
| Source | Quote | Link |
|---|---|---|
| EIP-20: approve | "Allows _spender to withdraw from your account multiple times, up to the _value amount. If this function is called again it overwrites the current allowance with _value." | eips.ethereum.org |
| EIP-20: allowance | "Returns the amount which _spender is still allowed to withdraw from _owner." | eips.ethereum.org |
| Circle FiatTokenV1 source: approve | "@notice Sets a fiat token allowance for a spender to spend on behalf of the caller." | GitHub |
| Circle FiatTokenV1 source: allowance | "@notice Gets the remaining amount of fiat tokens a spender is allowed to transfer on behalf of the token owner." | GitHub |
Related terms
See also
- Explainer: What is a token approval, and why should I revoke one I don’t recognise?
- Review: revain.org/wallets/rabby/
Checked against the sources on 2026-11-01.