What Is USDC? Stablecoin USD Coin (USDC) is produced by CENTRE, a partnership between Coinbase and Circle. The digital currency is supported by assets maintained at regulated and audited U.S. financial institutions that are denominated in dollars. Although USDC has several applications in the cryptocurrency industry, it is most frequently used by traders and in decentralized finance (DeFi) protocols.
What is USD Coin (USDC)?
Stablecoin USD Coin (USDC) is backed by dollar-denominated assets kept in segregated accounts with US-regulated financial institutions and is convertible 1:1 for US dollars.
Through their joint formation of the CENTRE Consortium, Coinbase and Circle worked together to power the launch of USDC. In countries where USDC support is available, Coinbase clients with US dollar accounts can swap 1 USDC for $1.00 (and vice versa) on the platform.
Background of USD Coin
The CENTRE consortium—a collaboration between Circle and Coinbase—launched USD Coin (USDC) in October 2018 as a fiat-collateralized stablecoin. The consortium was established to develop price-stable crypto assets and network protocols.
The idea for the project came from the realization that, in contrast to Tether, the market need a fiat-collateralized stablecoin with robust governance and transparency. By posting a monthly public attestation of 100% reserves of fiat tokens on CENTRE.io and outlining for CENTRE members the rules and criteria for USDC creation and redemption, USDC makes an effort to address these problems.
Members of the CENTRE consortium must also abide by important membership and operating requirements, including as licensing, compliance, technology and operations, accounting, and custody of fiat reserves, in order to become issuers within the organization.
As an alternative to fiat currencies, USDC has primarily been used by exchanges, which offloads the requirement to maintain banking links. In the developing DeFi ecosystem, USDC is also one of the few fiat-collateralized stablecoins that is accessible.
Read more: TOP 10 Best DeFi Coins To Trade & HODL In 2023: A Complete Lists For Crypto Traders
How Does USD Coin Work?
It is frequently referred to as a fiat-collateralized stablecoin and is backed by physical assets. Fiat-collateralized currencies, as the name implies, are backed by a state-issued currency, such as the US dollar or the British pound.
USDC is collateralized by cash and short-term US government bonds to maintain its constant value of $1. $1 is maintained as collateral for each USDC token that is currently in use.
Investors who purchase USD Coin do so with the expectation that one USDC would always be worth one dollar. So why would you own USDC? Buying USDC, storing it on an exchange or in a cryptocurrency wallet, and then using it to pay for additional cryptocurrency purchases is the most typical use scenario.
What Problems Does USD Coin Solve?
USD Coin solves the problem of volatile cryptocurrency prices. It is a stablecoin, meaning that its value is pegged to the US dollar. This makes it ideal for use in transactions where price stability is important, such as with online payments or international money transfers.
USDC also offers the benefits of blockchain technology, such as fast and secure transactions.
The USD Coin Team
The Centre consortium, a collaboration between Circle and Coinbase, created USD Coin. While Circle and Coinbase are the first commercial issuers of USDC, Centre established the technology and regulatory framework.
The businessmen Sean Neville and Jeremy Allaire launched Circle in 2013.
Circle is a recognized money transmitter, making its financial records public. Money Transmitters are US enterprises that provide money transfer services and are subject to federal rules and regulations. The corresponding amount of USD is held by one of Circle’s certified partners prior to the issuing of USDC. As a result, all USDC coins are controlled, open, and verifiable.
Additionally, Circle is recognized as the Goldman Sachs-backed cryptocurrency firm.
Partnerships
The USDC is a Partner of the data science and technology companies like IBM, Google, and Microsoft. They share the same values and goal of advancing technology to make our lives more efficient and providing access to the latest insights into the world.
Basic Information about USDC
USDC Token is a digital token that supports secure encrypted messaging and secure online payments. It is available as a ready-made app or you can also get it through Appcelerator. USDC Token is also a part of the USDC ecosystem which includes USDC app, USDCOME, and USDC Hangouts.
Key Metrics Of USDC
- Token name: USD Coin
- Ticker: USDC
- Blockchain: Ethereum
- Token Standard: ERC-20
- Contract: 0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48
- Total supply: 52,526,806,065
Read more: TOP 10 Best ERC20 Coins To Trade & HODL In 2023: A Full Guidance Of Potential Crypto For Traders
Market Capitalization
Market Cap of USDC is $52,534,068,472 at the moment, with 24-5 trading volume is $5,446,317,94 and Volume/cap is 0.1037
How Is USDC Backed?
It is frequently referred to as a fiat-collateralized stablecoin and is backed by physical assets. Fiat-collateralized currencies, as the name implies, are backed by a state-issued currency, such as the US dollar or the British pound.
USDC is collateralized by cash and short-term US government bonds to maintain its constant value of $1. $1 is maintained as collateral for each USDC token that is currently in use.
Investors who purchase USD Coin expect that one USDC would always be worth one dollar. So why would you own USDC? The most typical use scenario is buying USDC, storing it on an exchange or in a cryptocurrency wallet, and then using it to pay for additional cryptocurrency purchases.
Types Of USDC On Blockchains
There are two different types of USDC on blockchains. One is based on the ERC20 token standard, and the other is based on the Stellar network.
- ERC20 is the most common type of USDC. It’s supported by Ethereum, Binance Chain, TRON, and other blockchains.
- Stellar-based USDC is supported by Stellar, Algorand, and other blockchains.
How to Buy USDC Tokens?
Customers can purchase USDC on various exchanges, including Poloniex, Kraken, Bitstamp, and Kucoin, in addition to Coinbase and Binance, which were already mentioned. Additionally, it can be found on a variety of decentralized platforms, such as Uniswap (V2), Sushiswap, Balancer, Compound, and others.
As a retail user, you must complete the following steps in order to change your USD or any fiat currency into USDC:
- Open a profile on a partner exchange that accepts USDC.
- Fiat currency can be added to your exchange account via wire transfer, credit card, or bank account.
- With your fiat money, purchase USDC.
On the other hand, you can do the following to exchange your USDC for fiat money:
- The exchange platform is asked by a user to exchange any quantity of USDC tokens for fiat.
- After that, the exchange asks the USDC smart contract to exchange its tokens for currency and take out an equivalent amount of tokens from circulation.
- The issuer returns the requested amount in fiat currency, less any fees paid, to your bank account.
Or by opening a Circle Account, accredited investors and companies can buy USDC directly through Circle.
Read more: Why You Should Buy Bitcoin on Coinbase Pro and not Coinbase? Best Answer 2023
How to Store USDC Coins?
Users began storing USDC in personal wallets once USDC gained mainstream in 2020. Since USDC is based on Ethereum, there are numerous ways to store the asset, which can be further broken down into two fundamental categories using either hardware wallets or ERC-20 compatible wallets.
You can use any Ethereum wallet for this. Examples include Bitgo, MyEtherWallet, Coinomi, AlphaWallet, MetaMask, and Coinbase Wallet. The Ledger wallet is the most secure choice among hardware wallets.
Read more: Best Crypto Wallets For Storing Coins In 2023: Hot Wallets & Cold Wallets
Goals of USD Coin
The USD Coin has two goals:
- To be a global currency and an envoy for change. The USD Coin will help promote change and begin the process of internationalization of the culture and economy. The USD Coin will also promote the spread of about through the world. The USD Coin will do this by being an alternative to the Australian dollar and the Australian dollar.
- Additionally, the USD Coin will be an outlet for world-wide cultural and business events. The USD Coin will be checked more often than any other currency by news outlets and worldwide news sources.
What Are The Risks Involving In USDC?
As a cryptocurrency, USD Coin (USDC) is typically viewed as a risky investment. Despite the fact that stablecoins like USDC have less market volatility than other cryptocurrencies, regulatory bodies like the U.S. Securities and Exchange Commission may be more cautious when it comes to stablecoins. Before investing in USDC, investors should be aware of the risks.
What If USDC Collapses?
If USD coin collapses, the US dollar will no longer be the world’s reserve currency. Other currencies, such as the euro or Chinese yuan, will take its place. This would cause inflation in the United States, as the dollar would no longer be worth as much.
Advantages and Disadvantages
Advantages
The key benefit of USD Coin is that it makes it possible to purchase and sell other cryptocurrencies without requiring users to transfer fiat money in and out of exchanges.
Sending USDC is quicker than sending traditional currencies because payments happen instantly and it is possible to do so around-the-clock. Its minimal transaction costs make it both time and money efficient to use.
“What makes USDC such a remarkable product is that it’s easy to produce and redeem, with seamless connection with the existing global financial system,” said Jeremy Allaire, founder and CEO of Circle. Customers can thus use it as a very effective conduit between traditional electronic money and dollars from digital currencies.
According to Manoppo, “it also permits the transfer of capital across different geographical jurisdictions at a far faster rate than traditional wire transfers.”
Disadvantages
The use of USDC is still not without drawbacks. One is that there is no price growth. Users should be aware of the regulatory environment that surrounds stablecoins and digital currencies. Government restrictions on these digital currencies, according to crypto specialists, may have a debilitating impact on their future.
FAQs
Why USDC instead of USD?
Because the key benefit of USD Coin is that it makes it possible to purchase and sell other cryptocurrencies without requiring users to transfer fiat money in and out of exchanges.
Sending USDC is quicker than sending traditional currencies because payments happen instantly and it is possible to do so around-the-clock.
How Does USDC Stay at $1?
USDC is collateralized by cash and short-term US government bonds to maintain its constant value of $1. $1 is maintained as collateral for each USDC token that is currently in use. Investors who purchase USD Coin do so with the expectation that one USDC would always be worth one dollar.
How to earn USDC tokens?
It’s simple! Simply add USDC to your YouHodler wallet to start receiving free USDC each week.
Why is USD Coin popular?
Each coin in the USD Coin series has a fixed value of US$1 and is backed by a single US dollar in a separate bank account. Because of this, USD Coin is a well-liked option for cryptocurrency investors who want to steer clear of the price risk and volatility linked to major coins like Bitcoin and Ethereum.
What can I buy with USDC?
There are many things you can buy with USDC. You can buy books, videos, and other items. There are also special deals on items. You can find what you need right on circle.com.
How can I find more information about USD Coin?
The way to find more information about USD Coin is by looking at the internet. You can find out more information about USD Coin on the internet by clicking on its drawing card or by visiting its location. You can also find out more information about USD Coin on the internet by visiting its media relations page.
Conclusion
The overview of USD Coin or USDC provides a thorough description of one of the most well-known stablecoins. USDC can perform a wide variety of functions, with the main goal of providing price stability. It has unique elements, including laws and audits that boost confidence in the USDC stablecoin. Additionally, USDC’s applications go beyond access to DeFi services, cryptographic payments, and cross-border transactions.
Additionally, you must inform people of any potential uses for US Dollar Coins in governance, notably for the distribution of humanitarian help. Businesses, governments, and crypto consumers can seek out new value advantages using stablecoins as the field of decentralized applications develops.
Disclaimer: The information provided in this article is not investment advice from Cove Markets. Cryptocurrency investment activities are yet to be recognized and protected by the laws in some countries. Cryptocurrencies always contain financial risks.
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