USDC is an abbreviation for US Dollar Coin, which is a stable coin. That means it’s a cryptocurrency, but one primarily focused on price stability. It offers that stability by securing the backing of a reserve asset. In this case, that’s the USD fiat money. Here is why USDC might be important for crypto traders and why you should consider acquiring it!
How Does USDC Work?
Crypto markets are exciting and hard to predict because they have a high volatility level. That volatility might not always be good, which is why the traders are looking for more stable alternatives. It’s where USDC comes in with its unique concept of using backing from fiat currency.
If you want to get USDC with fiat money, it’s necessary to pass the verification checks first. Once you do, you can make a credit card or wire transfer from your bank account. The conversion turns those funds into USDC, which you can trade at the best crypto exchanges.
Taking advantage of USDC is no different than benefitting from similar stablecoins. You can trade to this currency to avoid any potential crashes and volatility you might sense coming. USDC is also useful if you want to convert crypto to fiat since you can exchange it for USD simply. Apart from trading, USDC is suitable for a range of DeFi protocols.
Who Created US Dollar Coins?
Two companies co-created USDC. The first one is a finance company from Boston called Circle, and the other is the famous crypto exchange Coinbase. It’s worth noting that Circle has the backing of Goldman Sachs and several other premium companies. The business was first launched in 2013, and it expanded to crypto markets several years later.
USDC: A Brief History
Did you know it only took four months between announcing and releasing the US Dollar Coin? The odds are Circle and Coinbase worked on it before announcing the launch, which is how they laid the groundwork.
Here is a brief history of USDC:
- 2018. The companies announced it in May, while USDC launched in September. The venture capital funding secured $110 million for the project. It took only several months to achieve the fifth position in the total market cap, which happened in December.
- 2019. Circle announced that they have confirmed $251 million Circle secured for the USDC. The currency expands its markets to 85 countries, and DAI accepts this crypto as collateral.
- 2020. Decentralized finance becomes popular, and the use of USDC increases. The company partners with Solana, Stellar, and Algorand. In October, the market cap exceeded $2.6 billion.
- 2021. The estimations are that the market cap is over $42 billion in December.
What’s So Special about USDC?
You’ll find many stablecoins backed by USD. Tether was the first one, but it lost its reputation due to an ongoing investigation. USDC launched as a reliable alternative, and here are its advantages:
- Reliable auditors. The famous accounting firm Grant Thornton audits the business.
- High regulation level. The company behind USDC is a registered business. It’s subject to US regulations, and that includes preventing money laundering.
- Mixing the best of both worlds. If you use banks, it takes forever to transfer USD. Thanks to USDC, these transfers occur much faster in crypto markets.
How Is the US Dollar Coin Produced?
You don’t mine USDC like Bitcoin or another crypto. Instead, these tokens are available as Solana SPL, Algorand ASA, and Ethereum ERC-20 coins. You can use fiat money to purchase them on major crypto exchanges like Binance.
The expansion to two other blockchains (it was initially an ERC-20 token) is encouraging. If you are looking for a stable coin option tied to the American Dollar, USDC can be a wise choice.