Stablecoins: Stability Redefined and Secure Crypto Economy!
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USDC
Cryptocurrency is a fast-moving, ever-evolving technology that has taken the world by storm since it launched in 2009. Nowadays, crypto is even used as currency! In this article, we’ll look at one of the newest cryptocurrencies: the USD Coin or USD-backed coin.
USD Coin was created through the Ethereum (ETH ) blockchain. It can be traded for U.S. dollars on the open market and stored in any virtual asset wallet. It’s referred to as a “stablecoin” because it is pegged to the value of the U.S. dollar.
USD Coin offers better mobility while being transparent and secure, making it an attractive choice for businesses dealing in online payments and those looking to invest in crypto with minimal risk.
In this article, we take a closer look at why assets like USDC are popular among investors and the latest price of the USD coin.
What is USD StableCoin?
USD Coin is a cryptocurrency that is pegged to the value of the American dollar or US dollar. It is known as a stablecoin, meaning that USDC is designed to maintain a stable value relative to the American dollar. Therefore, for every USD-backed coin in circulation, a corresponding American dollar is held in reserve.
USDC token is an ERC-20 token that runs on the ETH blockchain. A USD-backed coin is primarily used to move US currency digitally, quickly, and inexpensively. In addition, it is used for transactions on various crypto exchanges and as a way for traders to move funds in and out of cryptocurrencies without converting back to fiat currency.
The USDC can also be used for everyday transactions such as buying goods and services. Furthermore, as a stablecoin, it has less price volatility than other cryptocurrencies, making it a more practical currency for everyday use.
How does USD Coin work?
USDC stablecoin is pegged to the value of the U.S. dollar. This means that one USDC is always equal to one U.S. dollar.
USDC also uses blockchain or cryptographic ledger technology to track the ownership and transfer of coins. It is an ERC-20 token, which is built on the ETH blockchains. This allows USD-backed coins to be transferred quickly and easily between users, regardless of their location in the world. Simply put, USD Coin is a service that tokenizes USD and makes it easier for people to use them on the internet and public blockchains.
The USD-backed coin is issued by regulated financial institutions that hold U.S. dollars in reserve equal to the number of coins in circulation. This ensures that there is always enough backing for the coins and helps to maintain the stability of the USD-backed coin price.
When someone wants to purchase USD tokens, they send U.S. dollars to the issuer, who then mints an equivalent number of USDC and sends them to the buyer. Similarly, when someone wants to redeem it, they send the coins back to the issuer, who destroys them and sends U.S. dollars to the redeemer.
USD-backed coins can also be used for various purposes, such as sending and receiving payments, trading on cryptocurrency exchanges, and storing value. In addition, because it is pegged to the US dollar, USD-backed coin is less volatile than many other digital coins, making it a popular choice for those who want to avoid the risks associated with other digital assets.
The technology behind the USD Coin
The technology behind USDC involves a process called “tokenization.” This involves taking a real-world asset, such as the American dollar, and representing it on a digital ledger as a digital coin. For example, Circle converts American dollars into coins on the Ethereum cryptographic ledger to create USD-backed coins. These coins are then distributed to users who can trade them like any other digital asset.
One important aspect of USD-backed coins is that they are fully collateralized, meaning that for every USDC in circulation, an equivalent amount of USD is held in reserve. This ensures that the value of the USD-backed coin remains stable relative to the American dollar. Circle publishes monthly reports on the reserve balances to provide transparency and ensure that the collateralization ratio remains 1 USDC: 1 USD.
The technology behind USD-backed coins also includes USDC smart contract functionality, which allows for programmable transactions on the ETH blockchains. This enables developers to build decentralized applications (dApps) that incorporate USD-backed coins for payments or other financial transactions. For example, USD-backed coins can be used as a means of payment in a decentralized trade or as a medium of trade in a peer-to-peer lending platform.
What makes USD StableCoins unique?
Here are some unique features of USD C:
- Stablecoin: As mentioned, its coin is a stablecoin, which means it is designed to maintain a stable value with the USD. This makes it useful for transactions and as a store of value.
- Transparency: It is an ERC-20 token built on the Ethereum blockchains, which makes it transparent and auditable. Anyone can verify the number of USD-backed coins circulating and the corresponding US dollars held in reserve.
- Fast and Low-Cost Transactions: USDC allows quick transactions and processes with low fees compared to other digital coins, which makes it a practical option for payments and transfers.
- Integration with DeFi: It has been widely adopted by decentralized finance (DeFi) platforms, which allows users to earn interest on their USD-backed coin holdings or use them as collateral for loans.
- Regulated: USDC is issued by Circle, a financial technology company that is regulated in the United States. This means that USD-backed coin is subject to the same regulations as other financial instruments and provides users with a level of trust and security.
Community
There are many communities of USD-backed coin users, including:
- Crypto traders and investors: USD-backed coin is a popular trading pair on many cyber currency exchanges, and it is used by traders and investors as a way to move funds in and out of the digital currency market.
- Merchants: It can be used as a payment method by merchants who want to accept digital coins as a form of payment.
- Remittance companies: Every USDC may be utilized to send money across borders quickly and cheaply, making it an attractive option for remittance companies.
- DeFi users: USDC is widely used in the decentralized finance (DeFi) ecosystem, where it can be used as collateral, to earn interest, or to participate in liquidity pools.
- NFT marketplaces: USD tokens are often used as a currency for buying and selling non-fungible coins (NFTs), which are unique digital assets that can represent art, music, and other forms of creative content.
Partnerships
The following are some of the partnerships that USD-backed coin has established:
- Coinbase: USD-backed coin was launched by Circle in collaboration with Coinbase in 2018. Coinbase is one of the largest crypto trades in the world.
- Centre Consortium: this is a joint venture between Circle and Coinbase. It is responsible for the development, growth, and governance of USDC.
- Algorand: USDC is available on the Algorand digital ledger. This partnership enables faster and cheaper transactions and the ability to use USD-backed coins in decentralized applications built on Algorand.
- Stellar: USD-backed coin is now also available on the Stellar digital ledger. This partnership aims to expand the use of USD coins in the Stellar ecosystem by encouraging users to use USDC. It also includes remittances, micropayments, and other use cases.
- Chain: USD-backed coin is integrated with Chain’s digital ledger infrastructure, which enables businesses to build scalable cryptographic ledger applications.
- Aave: USD-backed coin is supported on Aave, a decentralized lending platform allowing users to borrow cyber currency.
- Compound: USD-backed coin is also supported on Compound. This decentralized lending platform allows users to earn interest on their digital coins.
- Nexo: USD-backed coin is supported on Nexo, a platform that allows users to borrow against their crypto asset holdings.
- BitPay: USD coins are used for purchases at merchants that accept BitPay. This global payment provider enables businesses to accept cuber currency.
- Visa: USD-backed coin can be used to settle transactions on Visa’s payment network through Visa’s partnership with Circle.
Where to sell or buy USD Coin?
Some popular options for buying or selling USDC include:
- Binance
- Coinbase Exchange
- Kraken
- Biconomy
- ByBit
- DigiFinex
- Bitfinex
How can USD Coin be mined?
USDC cannot be mined in the traditional sense of the term. Instead, it is created by regulated financial institutions that hold American dollars in reserve.
How does USD Coin compare against its competitors?
USDC competes with several other stablecoins in the market, including Tether (USDT), Dai (DAI), TrueUSD (TUSD), and Gemini Dollar (GUSD). Here is a brief comparison with its competitors:
- Tether (USDT): Tether is the most popular fiat-backed currency in the market, and it is also backed by the U.S. dollar. However, there have been concerns about its transparency and whether it has enough reserves to back all of its tokens in circulation. On the other hand, they have been transparent about USDC reserves and have been audited by Grant Thornton LLP.
- Dai (DAI): Dai is a decentralized fiat-backed currency that is backed by the U.S. dollar, but it is not backed by fiat currency. Instead, USDC is backed by a collateralized debt position (CDP) system that uses ETH as collateral. While DAI is decentralized, it has a more complex issuance process compared to USDC.
- TrueUSD (TUSD): TrueUSD is another fiat-backed currency that is backed by U.S. dollars held in escrow accounts. However, it has a relatively smaller market share compared to USDC and Tether.
- Gemini Dollar (GUSD): Gemini Dollar is a fiat-backed currency issued by Gemini Trust Company, a trading platform founded by the Winklevoss twins. It is also backed by U.S. dollars held in State Street Bank and Trust Company. However, GUSD has a smaller market share compared to USDC and Tether.
USD Coin History
Here’s a detailed history of the USD Coin:
- 2018: USD-backed coin was launched on September 26, 2018, as an ERC-20 token on the Ethereum (ETH) blockchain or cryptographic ledger. The USD stablecoin was launched by Centre Consortium or Partnership, which was a collaboration between Circle and Coinbase
- 2018: In November 2018, Circle, one of the two companies, announced that it had engaged Grant Thornton to provide attestation reports on the American dollar reserves backing USD Coin. These reports were designed to provide transparency and assurance to users that USDC was fully backed by USD reserves held in custodial accounts.
- 2019: In May 2019, Centre Partnership announced that it had raised $110 million in a Series E funding round led by Bitmain, a Chinese crypto-mining giant. Other investors included Blockchain Capital, Digital Currency Group, and Pantera Capital.
- 2020: In March 2020, Centre Consortium announced that it would expand the issuance of USD-backed coins to other cryptographic ledgers, including Algorand, Stellar, and Solana. Later that year, in July 2020, USD-backed coin surpassed $1 billion in market capitalization.
- 2021: In January 2021, it surpassed $10 billion in market capitalization. In May 2021, Circle announced it would become a publicly traded company through a merger with a special purpose acquisition company (SPAC) called Concord Acquisition Corp. The merger valued Circle at $4.5 billion. Later that year, in July 2021, the USD-backed coin became the second stablecoin to reach a market capitalization of $30 billion after Tether (USDT).
- 2022: In February 2022, Circle announced that it had acquired the U.S. cryptocurrency exchange Kraken for $1.5 billion. This acquisition made Circle one of the largest crypto companies in the world, with a combined market capitalization of over $15 billion.
Today, USDC is one of the most popular stablecoins in the crypto market, with a market capitalization of over $40 billion as of March 2023. It is used as a trading pair on many cryptocurrency exchanges and is accepted by many merchants and online platforms as payment.
USDC Price Statistics
USD Coin Price Live - USDC to USD
USD Coin (USDC) Market Cap
The daily trading volume
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