# Token approval (allowance)

Working definition: a permission letting another address spend a holder's tokens up to a set allowance.

Canonical: https://achivx.org/glossary/token-approval/
Updated: 2026-11-01

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](https://eips.ethereum.org/EIPS/eip-20) |
| EIP-20: allowance | "Returns the amount which _spender is still allowed to withdraw from _owner." | [eips.ethereum.org](https://eips.ethereum.org/EIPS/eip-20) |
| Circle FiatTokenV1 source: approve | "@notice Sets a fiat token allowance for a spender to spend on behalf of the caller." | [GitHub](https://raw.githubusercontent.com/circlefin/stablecoin-evm/master/contracts/v1/FiatTokenV1.sol) |
| 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](https://raw.githubusercontent.com/circlefin/stablecoin-evm/master/contracts/v1/FiatTokenV1.sol) |

## Related terms

- [Token standard (ERC-20, TRC-20, SPL)](/glossary/token-standard/)
- [Address poisoning](/glossary/address-poisoning/)
- [Blacklist (issuer blacklist)](/glossary/blacklist/)

## See also

- Explainer: [What is a token approval, and why should I revoke one I don’t recognise?](https://achivx.com/academy/how-it-works/what-is-a-token-approval.html)
- Review: [revain.org/wallets/rabby/](https://revain.org/wallets/rabby/)

Checked against the sources on 2026-11-01.

## revain.org
- https://revain.org/wallets/rabby/

## Sources
- https://eips.ethereum.org/EIPS/eip-20
- https://raw.githubusercontent.com/circlefin/stablecoin-evm/master/contracts/v1/FiatTokenV1.sol