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USD Coin (USDC) is a stablecoin launched in 2018 by Centre, which is a consortium created by Circle and Coinbase. USDC is an open-source protocol, which means anyone can use it — not just Circle and their partners. USDC along with tether (USDT) equates to more than 80% of total market capitalization for all U.S. dollar-pegged stablecoins. Though USDT has the largest market capitalization among all stablecoins, USDC has its advantages and differences from its peers.
USDC is basically a tokenized version of the U.S. dollar (USD). It is fully redeemable, meaning you can trade it for the same amount of cash you deposited to create your account. USDC provides customers with a fast and cost-effective way to transfer value quickly anywhere in the world. Unlike some stablecoins linked to the price of a single asset or basket of assets, USDC's value is tied directly to the U.S. dollar. USDC reserves are held in segregated accounts in the United States with regulated U.S. financial institutions in the form of cash and short-duration U.S. Treasuries.
The USDC protocol was made to provide better access to cryptocurrencies to the general public. The goal behind USDC is to help the cryptocurrency sector become more user-friendly. USDC was also developed in order to be used by businesses and individuals alike. As USDC provides an open-source smart contract, this allows other companies to develop their own blockchain products, such as wallets and exchanges. However, those who want to use the U.S. dollar as a payment or reward system for their customers, employees, or partners can access these services easily through USDC's Payouts solution.
USDC was developed to be used in place of the U.S. dollar in the crypto world and make it easy to exchange and use it. As it's pegged to the U.S. dollar, you can rely on its consistent value even as the value of other cryptocurrencies fluctuate. In contrast to other stablecoins, the team behind USDC commits to providing complete transparency and partners with financial institutions in maintaining its fiat reserves, a unique feature for a stablecoin. USDC exchanges and partners are obligated to report their U.S. dollar holdings regularly. USDC is a stablecoin that is issued by Circle. Circle and Coinbase formed the Centre Consortium as a governing body for USDC.
Among the differences between USDC and other stablecoins is that, according to Circle's site, "USDC reserves are kept in the custody of leading U.S. financial institutions, including BlackRock and Bank of New York Mellon. Cash is held at US financial institutions; US Treasuries are held at third-party custodians." USDC has been used as a substitute for U.S. dollars on major exchanges, such as Coinbase, Kraken, Binance, Poloniex, and Gemini.
There has been a change in the thinking of the large crypto investors known as whales. Data shows USD coin (USDC) has become the stablecoin of choice on the Ethereum blockchain, not the larger tether (USDT). In crypto, whales are the biggest cryptocurrency holders – institutional investors, exchanges, and deep-pocketed individuals – who are capable of moving large amounts of tokens and swaying market prices. Analysts closely watch their activity to spot trends and anticipate large price movements.
USDC, the second-largest stablecoin, has been gaining market share since the once-$18 billion UST stablecoin collapsed and USDT's peg to the dollar wobbled. CoinMetrics looked at blockchain data since May 9, when UST lost its peg to the U.S. dollar. The firm identified 147 Ethereum wallet addresses that increased their USDC balance by at least $1 million while decreasing their USDT balance by at least $1 million. Among them, there were 23 that added at least $10 million USDC and disposed of $10 million USDT. Many of these addresses are exchanges, custodial services, or decentralized finance protocols, the report added. The report also said USDC's advantage over Tether's USDT in so-called free float supply – the number of tokens that investors hold – on the Ethereum blockchain hit an all-time high on Tuesday among all holder groups.
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