All You Need to Know About USD Coin USDC

What is USD Coin

Amanda Aronczyk of our Planet Money podcast has this report from Buenos Aires. Bitcoin mag is the leading magazine on Cryptocurrency with years of experience covering Bitcoin’s movement since its first mad bull run. Our writers do exclusive research to give our readers the most current and correct information.

In a nutshell, anyone can create programmable contracts that run and execute on the Ethereum network. Such contracts are usually perfect for applications involving payments, since the contract terms can be enforced without human intervention. Circle is an official Money Transmitter, which makes the company an open financial book. Money Transmitters are US money service businesses that must comply with federal laws and regulations. Before the issuance of USDC, the equivalent amount of USD is with one of Circle’s accredited partners. Consequently, all USDC tokens are regulated, transparent and verifiable.

Crypto Tokens: What Are They And How Do They Work?

So Centre has forged partnerships with Algorand, Stellar and Solana, rival blockchains, to expand the market. The US Dollar Coin can be traded on Poloniex and Coinbase (the exchanges of USDC’s parent companies), and on other major exchanges like Binance and Huobi. The customer can also convert the USDC back into US Dollars, which will then be wired back into their bank account. According to Kraken, USD Coin transactions take about five minutes to complete and require 20 confirmations.

What is USD Coin

Therefore, we are not responsible for the investment decision in USD Coin and the resulting loss. Since USDC is not volatile, it works well as a payment method for goods and services. You can use USD Coin to pay for gift cards on Bitrefill, electronics on Newegg, or any other merchant that supports BitPay. Anyone from anywhere in the world can use USDC as a common and recognizable unit of currency.

USD Coin

One of the most popular accounting firms, Grant Thornton, carries out audits on USDC, thereby ensuring its credibility. You can buy fractions of USD Coin just like you can divide U.S. dollars into pennies. You can purchase as little as 0.001—equal to one-tenth of a cent—of USD Coin.

What is USD Coin

These include Gemini dollar, True USD, Paxos, and US Dollar Coin (USDC). Since then, it has expanded into cryptocurrency—raising millions in venture capital What is USD Coin and acquiring crypto exchange Poloniex. Because USD Coin runs on the Ethereum blockchain, it is widely supported by popular cryptocurrency wallets.

What Is a USD Coin? All You Need To Know About USD Coin

Luckily, though, swapping between USDT and USDC is relatively easy if you ever need to go back and forth. Stablecoins such as USD Coin are unlike most cryptocurrencies in that they have practically zero value as an investment vehicle. The only exception to that rule is if you live someplace where the US dollar is far more stable than the local currency.

  • The US Dollar Coin was created in a joint move by Coinbase, the hugely popular cryptocurrency exchange, and Circle, a crypto finance company based in Boston.
  • As mentioned earlier, crypto lending programs have failed in the past, leaving users high and dry.
  • The technology and governing framework are developed by Centre, while Circle and Coinbase are the first commercial issuers of USDC.
  • Therefore, it is practically impossible to consider such assets for regular crypto payments.
  • Money Transmitters are US money service businesses that must comply with federal laws and regulations.

They are incredibly convenient for traders too, since withdrawing a fiat currency from an exchange takes several hours or even days. USDC, often dubbed the USD Coin, stands tall amid the stablecoin spectrum. While predominantly anchored to the US dollar in a near 1-to-1 ratio, there have been moments where this peg has slightly wavered. Such fluctuations, though rare, highlight the challenges of seamlessly blending traditional finance (TradFi) with the unpredictable world of cryptocurrencies.

Limitations of US Dollar Coin

Nevertheless, the value of USD may depreciate for various reasons, including the possibility of it being depegged. Within a day of the closure of Silicon Valley Bank (SVB) on March 10, 2023, USDC experienced a significant drop in value, plummeting from its pegged value of US$1 to US$0.91. Since its introduction, USDC has established itself as a critical component of the stablecoin market with ample liquidity and trading across centralized and decentralized exchanges worldwide. USDC is available as ERC-20, the most widely used standard for blockchain apps, making it interoperable with all other Ethereum-based decentralized applications (DApps). Instead, the USD Coin is compatible with other significant blockchain networks, including Solana, Avalanche, TRON,  Algorand, Stellar, Flow and Hedera. TUSD is a stablecoin that came into existence because of the efforts of its parent company, TrustToken (a platform that is involved in the tokenization of real-world assets).

Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by to invest, buy, or sell any coins or digital assets. Any descriptions of products or features are merely for illustrative purposes and do not constitute an endorsement, invitation, or solicitation. The user receives the net amount equivalent to the one in USDC tokens, minus all incurred fees). As of now, Bitcoin and Ether seem to have the upper hand in the crypto world, albeit with the limitation of price volatility. Therefore, it is practically impossible to consider such assets for regular crypto payments. On the contrary, the USD stablecoin can help safeguard recipients against the concerns of price volatility.

Related Posts: