The US Dollar Coin (USDC) is a new stablecoin that was created in 2018. Circle and Coinbase jointly released it on September 26th, 2018. USDC is a cryptocurrency that is backed by the US dollar (TUSD), just like Tether and TrueUSD.
To put it succinctly, USD Coin is a service that tokenizes U.S. dollars and makes them usable on the web and public blockchains. In addition, USDC tokens can always be converted back into US dollars. The ERC-20 smart contract makes sure that the process of giving out and getting back USDC tokens runs smoothly.
Putting U.S. dollars on the blockchain provides much-needed stability to cryptocurrencies and makes global money transfers a matter of minutes. Trading, lending, risk management, and other financial activities can all benefit from these developments.
Which Group Is Responsible For The USD Coin?
Circle and Coinbase have collaborated to create the Centre consortium, which is responsible for developing USD Coin. The Centre created the protocol and regulatory framework, while Circle and Coinbase were the first commercial entities to issue USDC.
The Circle was started by Jeremy Allaire and Sean Neville in 2013.
Circle is a licensed money transmitter, making its books available to the public. Money service businesses in the United States are known as “Money Transmitters” and are subject to federal regulations. The corresponding US dollar amount is held with one of Circle’s authorized partners prior to the issuance of USDC. Because of this, you can rest assured that all USDC tokens are backed by a legitimate and auditable system. Circle is also notable for being the Goldman Sachs-backed crypto startup.
What is the function of the USD coin?
Coins denominated in US dollars are not created out of thin air. Each USDC token issued by Circle is 100% backed by a US dollar, guaranteed. Tokenization refers to the process by which USD is converted into USDC tokens.
The three-step process of tokenizing USD into USDC is as follows:
- The user wires US dollars to the bank account of the token’s issuer.
- The USDC smart contract is used by the issuer to generate USDC.
- Third, the user gets the newly made USDC, while the US dollars are held in reserve.
The process of exchanging USDC for USD is just as simple as minting the token.
The user initiates contact with the USDC issuer and requests to exchange their current holdings of USD for USDC tokens.
The issuer contacts the USDC smart contract and asks it to convert all of the tokens to U.S. dollars and remove from circulation an equal number of USDC tokens.
The issuer credits the user’s bank account with the specified amount of US dollars from its own reserves. After deducting the fees, the user is left with an amount equal to the amount in USDC tokens.
Unlike Tether (USDT), which is the most popular stablecoin, USD Coin’s developers are required to be completely open and work with a number of financial institutions to keep full reserves of the equivalent fiat currency.
Grant Thornton LLP publishes the quarterly USDC holdings reports submitted by all USDC issuers. Here you will find each month’s attestation report.
Usage Guidelines for the USDC
On the Ethereum blockchain, one USD coin (USDC) is equal to one US dollar. Because it is an ERC-20 token, it can be used in any app that recognizes that format.
In order to use Circle’s tokenization or redemption services for USDC, you must first create an account, complete KYC procedures, and link a valid bank account. Users of the Circle USD platform can do the following four things:
- U.S. Dollar tokenization
- Purchase USD with cash;
- Send USDC to Ethereum addresses that support the ERC20 token standard.
- Fund USDC from addresses outside of Ethereum.
With the exception of a $50 fee for unsuccessful bank transfers, Circle USDC does not charge its customers for tokenizing or redeeming their currency. Each and every one of Coinbase’s regular fees is applicable to USDC transactions.
At least 100 USDC must be redeemed before they can be exchanged for cash. Token requests can take up to 24 hours to process on business days.
Tokenization can take up to 2 business days and requires no minimal tokenization amount.
In general, people use USDC and other stablecoins to:
You can now short cryptocurrency without selling it, and in the near future, purchasing cryptocurrency will be much simpler.
Try to avoid traditional methods of acquiring and managing money.
In countries like Venezuela and Turkey, hyperinflation must be avoided at all costs.
Instant, worldwide, secure, and inexpensive money transfers;
Spend them on a wide variety of blockchain-based games, dApps, and exchanges.
If you’re looking for a stable cryptocurrency, how does USDC coin stand out from the rest?
There are four broad types of crypto stablecoins, and they are as follows:
Fiat-collateralized. All stablecoins that are pegged to a fixed amount of fiat currency are included. Every single coin backed by fiat currency is a centralized system. Several popular digital currencies use the symbol “USDT,” including Tether, TrueUSD, Gemini Dollar, Paxos Standard Token, Digix Gold, and USD Coin (USDC).
Crypto-collateralized Stablecoins are digital currencies whose value is fixed relative to another cryptocurrency. Havven and Makercoin are two such coins (nUSD & HAV).
non-collateralized algorithms. Financial models built in code aim to maintain stable prices without the use of collateral. Projects like Basis, Kowala, and Fragments are just a few examples.
hybrid. Stablecoins that use a combination of the aforementioned techniques Constructions as illustrations: carbon.
First, there are fiat-collateralized coins like USD Coin, which is a centralized stablecoin. All projects in the same category function in a very similar way, with only subtle distinctions between them. Digix Gold (DGX), whose value is tied to gold, and Tether (USDT), which won’t agree to a truly transparent audit, are two of the most well-known.
Most stablecoins that are backed by fiat currencies like the US dollar also issue regular proofs of their value. Their fee structures and the organizations they work with are the main things that make them different, but other than that, their business models are the same.
How Do I Obtain US Dollar Coins?
The following markets offer trading in USD Coin (USDC):
- Binance (paired with BTC and BNB)
- Poloniex (paired with BTC, ETH, XRP, BHC, STR, LTC, ZEC, XMR, DOGE).
- Bitcoin Core (paired with BTC and ETH).
- In conjunction with Coinbase
- CoinEx (paired with USDT)
- Coinsuper (paired with BTC and USD).
- OKEx (paired with BTC and USDT).
- CPDAX (paired with BTC).
- Hotbit (paired with USDT).
- Kucoin (paired with BTC, ETH, and USDT).
- Korbit (paired with KRW).
- FCoin (paired with USDT)
- LATOKEN (paired with BTC and ETH).
- SouthXchange (paired with BSV and DASH).
- COSS (paired with BTC and ETH).
- Crex24 (in conjunction with USD).
The Best Places to Keep US Coins
The USDC token is an Ethereum-based ERC-20 token, so it can be kept in any wallet that supports the Ethereum blockchain. MyEtherWallet, MetaMask, Mint, and Jaxx are the most well-liked choices. View this short tutorial if you need help creating an Ethereum wallet.
Right now, the project status is
The team behind USD Coin is solid, and the project is progressing quickly. More than 60 partners have joined the project’s ecosystem since its announcement in May 2018.
Recent developments in the USDC project have focused on the extent to which the stable cryptocurrency is still under the direct control of the project’s creators. If the creators suspect that the USD coins are being used for illegal purposes, they can blacklist addresses and freeze accounts.
However, similar provisions can be found in the vast majority of stablecoins. Only Maker’s DAI is a stablecoin that doesn’t have any of these restrictions.