USD Coin is a digital stablecoin linked to the US dollar. It uses the blockchains of Ethereum, Stellar, Algorand, and Solana to function. The Centre consortium, which includes its two primary founding members, Circle and Coinbase, first developed USDC. Each USDC coin is backed by a $1 reserve that is kept on hand and is periodically audited by Grant Thornton, a significant accounting firm. In March 2021, it was revealed that Visa would make it easier to use USDC for settlement on its payment network. USDC was released in September 2018.
Stablecoin USDC functions on a variety of blockchains, like Ethereum. It is pegged to the dollar’s market value. A USDC is equivalent to one U.S. dollar, just like the stablecoin tether (USDT). The assured 1:1 ratio makes it a reliable medium of trade.
As the crypto ecosystem has grown, a lot of stablecoins have grown and now form a vital component of the market. Technology determines how a stablecoin maintains its stability, also known as its peg. A centralised organisation can issue stablecoins or a decentralised organisation can act as the collateral. They may even employ one of the many algorithmic processes available to keep prices steady.
The purpose of a stablecoin like USDC is to speed up and reduce the cost of transactions. Despite doubts regarding the tether stablecoin’s complete backing by U.S. dollar reserves, some investors feel that USDC is more open: The American division of the international accounting company Grant Thornton, LLC, keeps an eye on its reserves. Visa said that it would start using USDC to settle transactions on its payment network on March 29, 2021. There were 55.09 billion USDC in circulation as of June 2022.
Circle developed USD Coin, a digital currency with financial backing that is overseen by the Center consortium. The USD coin, which is pegged to the US dollar, is the second most widely used stablecoin after Tether. It now does business on a number of different protocols, including those for Tron, Stellar, Algorand, Solana, and the Hedera Hashgraph network, in addition to the Ethereum network. Aside from Circle, notable investors with stakes in the USD coin include the well-known US cryptocurrency exchange Coinbase and the Bitcoin mining firm Bitmain. Most crypto investors use the coin as their primary means of payment to enter the decentralised finance (DeFi) ecosystem and global crypto market.
USD Coin follows the standard regulatory protocol. To utilise USD coin, users must finish a know-your-customer (KYC) procedure. They can link their bank account and send US money to their USD Coin account once this process is finished. Also, you can transfer your USD Coin back to a conventional bank account.
To purchase USD Coin, You have to create an account with any exchange that accepts the stablecoin. Coinbase is the most well-liked choice because it makes it simple to convert other cryptocurrencies to USDC. You can go ahead and purchase any quantity of USD Coin you desire once your account has been created. You won’t be getting more than what you paid into the USD Coin because it is pegged at a 1:1 ratio to the US dollar. After confirming your purchase, you have the option of leaving it on the platform or sending it to a personal wallet. To keep your USD Coin secure, you might also think about using hardware wallets like the Trezor or Ledger Nano series.
Many have begun to distrust the sincerity of individuals who support stablecoins due to the uncertainties surrounding fiat backing. However, for several reasons, the USD Coin is considered as a safer alternative to Tether’s USDT. One of them is that, unlike Tether, which is still organising its fiat reserves, USD Coin has not involved in any legal disputes with authorities. Secondly, USD Coin accounts are now protected by the Federal Deposit Insurance Commission (FDIC), allaying user concerns about the service.
Also Read : -
- Ethereum Explained.
- Tether Explained.
- XRP Explained.
- USD Coin Explained.
- BNB Explained.