USD Coin or USDC is comparatively a newer stablecoin that is backed by US dollar. It was introduced to the crypto world by a collaboration of Circle and Coinbase on September 26, 2018. Competitors of USDC include Tether (USDT), Celo Dollars (cUSD) or TerraUSD (UST).
USDC was launched to tokenize US dollars and enable their use over digital platforms and public blockchains. USD coins can be converted to USD at any time and they are issued and redeemed with ERC-20 smart contract.
Bringing USD on the blockchain facilitates their global movement within minutes and brings the much-required stability to cryptocurrencies. Additionally, the introduction of USDC opens the doors to newer opportunities for trading, lending, risk-hedging and much more.
The development of USD Coin can be accredited to the Centre consortium, a partnership between Circle and Coinbase. Centre is responsible for developing the technology and governing framework of the coin while Coinbase and Circle are the first commercial issuers of USD Coin.
Circle is an authorized Money Transmitter that makes the organization an open financial book. It was founded by Jeremy Allaire and Sean Neville in the year 2013. Money transmitters are essentially US money service companies that are required to comply with federal regulations. It is commonly known to be the crypto startup backed by Goldman Sachs.
A USDC coin can only be issued when its equivalent amount of US Dollars is in possession of either of Circle’s accredited partners. This implies that each and every USD coin is regulated, transparent and verifiable.
Circle ensures that each USD token is backed by one US dollar. This process of digitizing US dollars into digital currency USDC is known as tokenization.
This process of tokenizing USD into USDC consists of three-steps:
Redeeming USDC for USD is also a simple process:
USDC is different from Tether (USDT), another popular stablecoin as it is obligated to provide complete transparency and work in collaboration with several financial institutions to maintain complete reserves of the equal amount of fiat currency.
All USDC issuers are necessitated to regularly report their USD holdings which are then published for public viewing by Grant Thornton LLP.
USD Coin (USDC) is also available at LCX Exchange.
Register or Login at LCX to start trading $USDC.
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