Crypto exchange Coinbase added USDC stablecoin from Circle

Cryptocurrency USD Coin
While most cryptocurrencies strive for at least partial decentralization from the stock market, some companies, on the contrary, issue digital coins tied to fiat currencies.

We are talking about so-called stablecoins. These are cryptocurrencies that can be pegged to the dollar, euro, or even gold and oil. They are less susceptible to exchange rate fluctuations, however, they also have significant disadvantages.

In this article we will talk about the cryptocurrency USD Coin or simply USDC, which is a digital analogue of the American dollar, and was created by the teams of the startup Circle and the Coinbase exchange.

What is USD Coin (USDC) and what goals does the project pursue?
The difference between USDC and USDT and other stablecoins
Why is USD Coin cryptocurrency better than the dollar?
Rate and capitalization
Where to buy and how to store USDC stablecoin
Advantages and disadvantages
Prospects for USDC

What is USD Coin (USDC) and what goals does the project pursue?

The USD Coin cryptocurrency is a joint project between Circle (Circle Internet Financial) and the Coinbase cryptocurrency exchange. The development was carried out by their joint organization Center Consortium.

USDC is a stablecoin created on the Ethereum blockchain according to the ERC-20 standard. In fact, the coin is a tokenized US dollar as it is completely tied to its value.

What is the cryptocurrency USD Coin (USDC)

USD Coin (USDC) is a dollar-pegged stablecoin released in 2020 by Coinbase and Circle Financial. Unlike Tether, USD Coin operates on a fully regulated US market and publishes a full audit of its dollar reserves.

USDC was created and launched in September 2020 by the open-source CENTER consortium developing a decentralized fiat stablecoin network. CENTER was founded in 2020 by Circle and Coinbase (Circle is a peer-to-peer payment technology company founded by Jeremy Allaire and Sean Neville in October 2013, and Coinbase is a popular cryptocurrency exchange founded in June 2012 by Brian Armstrong and Fred Ehrsam) . CENTER's goal is to develop a pricing system, stable crypto assets, management and creation of network protocols for USDC and other stable coins.

Unlike other stablecoins that only have a single issuer, USDC is designed for multiple issuers as more institutions join the CENTER consortium. The technology and governance structure are developed by CENTER, but other organizations can trade the token. Circle and Coinbase are the first commercial USDC issuers.

The difference between USDC and USDT and other stablecoins

Stablecoins
You may ask how the USD Coin cryptocurrency differs from other stablecoins, such as USDT (Tether cryptocurrency). To this, the Center team responds that USD Coin is ready to solve the problems that arise with other stablecoins: instability, compliance with banking standards, and even the lack of dollar backing.

The last point concerns specifically Tether, which is associated with the recent scandal with the Bitfinex exchange. As it turned out, at some point USDT was only 75% backed by the dollar. Tether has since updated its policy, stating that the coin's reserve includes not only US currency, but also "cash equivalents" and other assets. And according to the latest data, the USDT team has also invested in Bitcoin. That is, to some extent, Tether is backed by BTC.

In turn, the USD Coin cryptocurrency offers open source code, a transparent ecosystem and is fully pegged to the US dollar. The main difference is that all operations for issuing tokens comply with banking standards, the laws of the United States and the rules of regulators.

At the same time, the Center has all the necessary licenses to conduct banking operations and adheres to the anti-money laundering policy. To do this, the company's clients are required to undergo a verification procedure - KYC.

Another important advantage of the USD Coin cryptocurrency over other stablecoms is its partnership with really serious companies. For example, ]ASIC miners[/anchor] Bitmain, investment bank Goldman Sachs Group, search engine Baidu and leader in the venture investment market IDG Capital.

Wiki / USD Coin (USDC)

USD Coin is a tokenized dollar and is tied to its value.

USD Coin is positioned as a stablecoin that has financial and operational transparency.

Banks can act as issuers of the USD Coin cryptocurrency. To do this, banks need to be licensed to carry out financial activities, comply with AML policies and FATF standards, have a high reputation among financial institutions and publicly provide quarterly financial reports and evidence of holding reserves. Issuing companies are required to support fungible exchange and redemption of USDC tokens from other authorized issuing partners. The company also works together with auditors who must conduct independent audits of third-party issuers. Center is focused on the global market and plans to attract issuing banks from any currency area of the world in the future, which will be able to issue USDC tokens.

Among Center's partners there are such well-known companies as Goldman Sachs - one of the world's largest investment banks, the largest manufacturer of ASIC miners Bitmain, Blockchain Capital and others.

USD Coin vs US Dollar

The obvious advantage of stablecoins over fiat currencies is autonomy. Banks dictate their own conditions for providing financial services, which are not always beneficial for the client. USD Coin is stored on users’ personal accounts and cryptocurrency wallets, and not on deposits in banks, which dictate their restrictions to clients.

Bank transfers are carried out within a few days. Transactions on the USDC network occur without delay. Delays are possible only in cases of high network load.

When making a bank transfer, users must pay a fee, which is usually at least 2%. Transfers using USDC occur with a significantly lower commission.

And finally, when exchanging currencies through banking systems, users buy at an inflated rate and are forced to sell at a reduced rate. Stablecoin exchange occurs at the current rate through crypto exchanges or the Circle app.

Benefits of USD Coin

Supports open source and transparent ecosystem. Unlike other stablecoins, the issuance of USD Coin tokens complies with global banking standards and all updates occur in accordance with the rules established by financial institutions and the laws of the United States of America governing the activities of issuers.

Safety. The development of the USDC stablecoin was carried out taking into account the shortcomings of the stablecoins existing at that time. In accordance with the rules of US law regarding assets and securities, Center clients are required to complete the KYC procedure and verify their identity in order to use the services provided by the issuer.

Issuers can reserve USDС tokens in the system, which are backed by fiat. To redeem tokens, you must make a request to the Center and, after successful verification and validation, USDC tokens are irrevocably “burned”, and funds are transferred to external banks from the underlying foreign exchange reserves. This ensures that there is no excess emission of stablecoins.

It is safe to say that USD Coin is the future of stablecoins. USDC has all the advantages of blockchain and at the same time complies with all legal regulations, which ensures financial transparency and allows you to enlist the support of users who shy away from cryptocurrencies due to security holes and high volatility.

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Why is USD Coin cryptocurrency better than the dollar?

Despite the fact that Center cooperates with banks, the main advantage of the USD Coin cryptocurrency over the dollar is its autonomy. By using this stablecoin, a person does not depend on the conditions imposed by financial institutions.

However, a fiat currency transaction through a bank can take several days. USDC does not have such a problem: transactions take place without delays. Online fees are also significantly lower than with a bank transfer.

The main difference between the USDC stablecoin and fiat coin is that when buying a dollar, a person is forced to sell it at a lower rate. In the case of this stablecoin, buying one coin, the user will give exactly one dollar.

Also watch a video review of the USD Coin cryptocurrency:

USD Coin Cryptocurrency Review

You can exchange for USD Coin (USDC):

Litecoin (LTC) to USD Coin (USDC)
Binance Coin (BNB) to USD Coin (USDC)
Cash EUR to USD Coin (USDC)
Perfect Money USD to USD Coin (USDC)
Cash USD to USD Coin (USDC)
Promsvyazbank RUB to USD Coin (USDC)
AdvCash USD to USD Coin (USDC)
Ethereum (ETH) to USD Coin (USDC)
AdvCash USD to USD Coin (USDC)
TrueUSD (TUSD) to USD Coin (USDC)
Tether Omni (USDT) to USD Coin (USDC)
Cash EUR to USD Coin (USDC)

Rate and capitalization

USDC tokens are issued by issuers, and capitalization increases when US dollars are deposited into the Center system reserve. To do this, you must have licenses from financial organizations, pass the Anti-Money Laundering (AML) check and meet the standards of the Financial Action Task Force (FATF).

Next, to become an issuer of the USD Coin cryptocurrency, you need to create a one-to-one reserve with the issued coins (1 USDC = $1) and provide an audited report on its availability every month.

According to CoinMarketCap, USD Coin ranks 31st. The number of USDC tokens issued to the market is 362,185,161, with a capitalization of $361,107,926. The daily trading volume is $94,596,108.

USDC rate for all time
// Source: Coinmarketcap
During its existence, that is, from October 2020 to May 2020, the USD Coin cryptocurrency rate fluctuated on average from $0.97 to $1.05. The maximum figure a few days after the launch reached $1.11.

For example, Tether has high volatility. For all time, USDT had a maximum of $1.21 and at the same time a minimum of $0.84.

Where to buy and how to store USDC stablecoin

Purchasing stablecoins
USDC has a significant advantage over other stablecoins - the project team did not encounter the problem of listing and distributing their coin. The fact is that Circle owns the Poloniex cryptocurrency exchange, and the development was carried out jointly with Coinbase. Accordingly, USD Coin immediately after its release appeared on some of the largest platforms.

In total, USDC is traded on 19 exchanges, the most famous of which are: Binance exchange, Coinbase Pro, OKEX, Bitfinex, KuCoin.

However, in addition to exchanges, Circle also offers several services, both for investors and for making simple money transfers.

Circle Invest. A platform that helps novice investors invest in cryptocurrency;
Circle Pay. With this app, you can easily transfer both digital and fiat currencies;
Circle Trade. This is a kind of analogue of a cryptocurrency exchange, with the main emphasis being on the exchange of electronic money;

Thus, the project team is promoting its cryptocurrency, trying to make it as simple and accessible as possible for use even by novice users. You can buy USD Coin cryptocurrency directly on the Circle website by first registering.

Since USDC is based on ERC-20, all wallets that support this standard are suitable for storing it. There are all types of wallets for this stablecoin: browser-based, electronic, hardware, mobile, paper, cold, and so on. You can also store your coin on an exchange, although this method is less secure than others.

Wallets where you can store USDC
// Source: centre.io
Among the most popular wallets that support ERC-20, there are several:

Coinbase Wallet – a wallet from one of the creators of USDC;
MyEtherWallet is not a wallet, but a tool for simple and secure interaction with blockchains. Supports all tokens based on the ERC-20 standard;
Exodus is a multi-cryptocurrency wallet that supports more than 100 coins, including stablecoins.

Crypto exchange Coinbase adds support for the first USDC stablecoin from Circle

Leading American cryptocurrency exchange Coinbase announced in its blog its support for a new stablecoin from Circle. Thus, the digital currency USDC, the value of which is pegged to the US dollar in a 1:1 ratio, has taken its rightful place on the Coinbase trading platform.

Starting October 23, users of the US crypto exchange can buy, sell, send and receive USD Coin virtual coins within supported jurisdictions. The new coin is available both on the Coinbase exchange and in exchange applications for iOS and Android devices.

According to the announcement, US customers located outside of New York State can buy and sell USDC tokens, while users around the world can only send and receive Circle's virtual coins. In the future, the Coinbase team plans to expand the geographic reach of the USDC token.

It is worth noting that Coinbase is the first to add a digital currency to the trading platform, which is fundamentally different from other coins such as Bitcoin and Ether. After all, 1 USDC token, built on the Ethereum blockchain, is always worth 1 US dollar (USD).

Moreover, all USD Coin virtual coins are fully backed by physical fiat US dollars, which are held in the accounts of the issuing company and are subject to regular public reporting. The underlying technology behind the USDC stablecoin was jointly developed by startups Coinbase and Circle, which act as partners and co-founders of the new CENTER Consortium.

Starting today, Coinbase customers in supported jurisdictions can buy, sell, send, and receive the USDC stablecoin. The advantage of a blockchain-based digital dollar is that it's easier to send, use in decentralized apps, and store locally. Get started: https://t.co/O6tgs8tMxz pic.twitter.com/NN2NLY4gwE
— Coinbase (@coinbase) October 23, 2020

It is also worth emphasizing that the advantages of a tokenized US dollar are undeniable, since programming is significantly simplified, money is moved much faster, it becomes possible to use tokens pegged to the dollar in decentralized applications (dApps), and it is also possible to easily organize local storage of virtual coins. That's why the addition of Circle's USDC cryptocurrency to the Coinbase trading platform is an important step towards a more open financial system.

According to the team of the American company, the USDC stablecoin will be integrated into the Coinbase Pro platform in the coming weeks. Moreover, the Coinbase Wallet, launched in the fall by Coinbase, has already received support for the digital currency USD Coin.

Let us remind you that quite recently the first digital token of the ERC-20 standard appeared on the Coinbase Pro cryptocurrency exchange. The American startup also recently opened a new office in Ireland.

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Advantages and disadvantages

In 2020, there are quite a few stablecoins in the cryptocurrency market, but they all have both positive and negative sides. In most cases, the disadvantages outweigh the advantages. By releasing the USD Coin cryptocurrency, the Center consortium tried to solve the problems of other stablecoins.

Pros:

The Circle company has been present on the market since 2013, and has managed to establish itself as a professional in the field of payment system development;
Powerful partners who have made large investments in the development of the project;
Security for institutional investors – mandatory verification and KYC on the Center site (but this is a minus for ordinary users);
Rapid distribution across leading exchanges;
Less volatility compared to other stablecoins;
Open source code that anyone can study;
All transactions comply with US laws and financial regulators;
Adding USDC is possible to any exchange that supports the ERC-20 standard;
Each coin is truly pegged to one US dollar;
Partnerships with popular blockchain platforms: Abacus, BitPay, Origin, Ledger, Nexo and others;
At the moment, USDC is the only stablecoin that has passed the re-audit without any complaints.

Minuses:

The youth of the project. Now it is not even a year old, and it is too early to judge how the USD Coin cryptocurrency will function in the future. For example, Tether had no problems at all for the first two years. But later they appeared, and many investors turned away from the project;
Mandatory completion of the KYC procedure when working at the Center site. And while this is good for institutional investors, the average user completely loses anonymity;
USDC has yet to prove its usefulness over other stablecoins;
Not suitable for long-term investments, designed only for fixing profits;
There are complaints from users about the work of Center support service.