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USD Coin, also known by its cryptocurrency ticker code USDC, is a stablecoin developed by Centre, a non-profit supported by major cryptocurrency exchange Coinbase and Fintech firm Circle. USD Coin has a set value of US$1 per coin, and each USD Coin is backed by a US dollar in a separate bank account. This makes USD Coin a popular choice for cryptocurrency investors who want to avoid the volatility and price risk associated with big currencies like Bitcoin and Ethereum. Its current market cap is US$ 29,279,268,065 (up by 0.27%) and fully diluted market cap is US$ 29,264,720,129 (down by 0.00%). The current USD Coin price is US$1.00, with a 24-hour trading volume of US$2,73,48,02,617.
USD Coin (USDC) is a new stablecoin that is linked to the US dollar. It was released on September 26, 2018, as a result of a partnership between Circle and Coinbase. USDC is a USD-backed cryptocurrency that competes with Tether (USDT) and TrueUSD (TUSD). USD Coin, in a nutshell, is a service that tokenizes US dollars and allows them to be used on the internet and public blockchains. Furthermore, USDC tokens can be converted to USD at any moment. The ERC-20 smart contract ensures the issuing and redemption of USDC coins. Putting US dollars on the blockchain allows them to be sent anywhere in the globe in minutes and gives cryptocurrencies much-needed stability. It also offers up new trading, lending, risk-hedging, and other possibilities.
USD Coin (USDC) is a fiat-collateralized stablecoin established by the CENTRE consortium, a collaboration between Circle and Coinbase to develop price-stable crypto assets and network protocols. It was launched in October 2018. Jeremy Allaire and Sean Neville, two entrepreneurs, established Circle in 2013.
USDC, like its predecessors, aims to address two key concerns with existing cryptocurrencies: excessive volatility and fiat currency-to-cryptocurrency conversion. In contrast to Tether, the project was born out of the realization that the industry required a fiat-collateralized stablecoin with robust governance and transparency. USDC tries to address these concerns by releasing a monthly public attestation of 100 percent fiat token reserves on CENTRE.io, as well as providing CENTRE members with explicit regulations and procedures for USDC creation and redemption. Members of the CENTRE consortium must also meet the important membership and operating standards, such as licensing, compliance, technology and operations, accounting, and custody of fiat reserves, to become issuers.
USDC tries to address these concerns by releasing a monthly public attestation of 100 percent fiat token reserves on CENTRE.io, as well as providing CENTRE members with explicit regulations and procedures for USDC creation and redemption.
Circle and Coinbase announced a substantial improvement to the USDC protocol and smart contract in 2020. These improvements are intended to make it simpler to use USD Coin for everyday payments, commerce, and peer-to-peer transactions.
USD Coins aren't created out of thin air. Every USDC coin is backed by a single US dollar, according to Circle. Tokenization is the process of converting US cash into USDC tokens.
The conversion of USD to USDC is a three-step procedure:
It's just as simple to exchange USDC for USD as it is to create the token, only the procedure is backward:
Unlike the most popular stablecoin, Tether (USDT), the USD Coin's developers are required to maintain full reserves of the corresponding fiat currency and to operate with a variety of financial institutions.
On the Ethereum blockchain, USD Coin (USDC) is a 1:1 representation of one US dollar. It's an ERC-20 coin that works with any app that supports the protocol.
To use Circle to tokenize or redeem USDC, you must first create an account, authenticate your identity (KYC), and link a valid bank account. Users may execute four basic actions on the Circle USD platform:
Except for a US$50 penalty for erroneous and rejected bank transactions, Circle USDC does not charge customers any fees for tokenizing and redeeming services. All normal costs apply to Coinbase USDC transactions. The minimum amount of USDC that may be redeemed is 100 USDC. Only business days are used to process tokens, and the procedure might take up to 24 hours. The procedure can take up to two business days and there is no minimum tokenization value.
Stablecoins like USDC are commonly used:
USD Coin cannot be mined. Every time someone buys or converts cash and obtains a USD Coin, more coins are produced. If this occurs, a fresh dollar is deposited into the USD Coin bank account.
Coinbase is the simplest way to acquire USD Coin since it was a driving force behind its creation. USD Coin may also be traded on Binance, Bitfinex, Coinbase, Crypto.com, Kraken, and Uniswap, among other major cryptocurrency exchanges.
USD Coin is extensively supported by major cryptocurrency wallets since it operates on the Ethereum network. Software wallets like Coinbase Wallet and Exodus, as well as hardware wallets like Ledger, are examples.
USD Coin transactions take around five minutes to complete and require 20 confirmations, according to Kraken. This is comparable to the way other Ethereum-based currencies work.
USDC transactions require Ethereum gas costs since it uses the Ethereum blockchain. Due to network congestion, the price of Ethereum gas might fluctuate.
The USDC coins in circulation are all ERC-20 tokens, which are located on the Ethereum network. One of the most significant advantages is the ability to connect it with Ethereum-based applications. As previously stated, the security and confidence in this stablecoin are provided by demonstrating that US dollars are safely maintained in reserve.
USD Coin's major distinguishing feature is that it is always worth $1. This is in stark contrast to extremely volatile currencies like Bitcoin, Ethereum, and Dogecoin, which may see large price fluctuations in a single day.
It's impossible to offer a precise amount because the number of USDC that can exist is theoretically unlimited. When someone wants to buy a coin with their hard-earned dollar, new ones are made in response to demand. However, several variables have contributed to USD Coin's meteoric rise in popularity throughout the years, particularly in 2020. The rapid, dramatic surge in popularity of decentralized finance is one of them. Given its role as an onramp to the larger ecosystem, USDC is a regular sight on many DeFi protocols.
Fiat-collateralized, crypto-collateralized, algorithmic non-collateralized, and hybrid are the four types of crypto stablecoins. USD Coin is a controlled stablecoin that belongs to the first type of fiat-collateralized currencies. This includes all stablecoins that are linked to a fixed amount of fiat currency. By design, all fiat-collateralized currencies are centralized. In general, all projects in the same category operate in the same way, with just small variations. Tether (USDT), which is renowned for refusing to perform a truly public audit, and Digix Gold (DGX), which is linked to gold, are two of the most notable. The rest of the fiat-collateralized stablecoins are backed by US dollars and provide regular attestations. The primary variations between them are their pricing policies and the organizations with whom they collaborate, but the economic strategy remains much the same.
USD Coin (USDC), Circle's dollar-pegged stablecoin, appears to have lost one of its key competitive advantages against Tether (USDT) in August 2021. Following an audit that found that not all of USDC's reserves were stored in cash, major crypto exchange Coinbase made a significant modification to the USD Coin page on its website. The prior assertion that "each USDC is backed by one US dollar held in a bank account" was contradicted by this. When visiting the USD Coin homepage on Coinbase, users are now presented with a message stating that USDC is "backed by fully reserved assets".
With a market value of approximately US$28 billion, USD Coin is the eighth-largest cryptocurrency. According to its most recent Consolidated Reserves Report, USDC is the second-largest stablecoin behind Tether, which has over US$63 billion in total assets. USDC has grown in popularity as a stablecoin completely backed by US dollars since its introduction.
Traditional investors are cautious about cryptocurrencies for two reasons: regulatory uncertainty and volatility. This new generation of stablecoins aims to alter that by acting as a conduit for well-known organizations to enter the market. The parent business of USDC is unafraid to state that the currency is for people who wish to move medium to big quantities of money. Stablecoins like USDC might help bring cryptocurrencies into the mainstream by making them more appealing to institutional investors.
