What is USDC? USD Coin USDC A Stablecoin Pegged to the U S. Dollar

USDC is used in a variety of dApp and DeFi protocols — such as Aave, Celsius Network, Compound, Dharma, OpenSea, and others. USD Coin (USDC) is a cryptocurrency designed to maintain a constant value of $1 USD. Stablecoins are an essential tool in the dynamic cryptocurrency market, and can help digital asset holders What is USD Coin within the crypto ecosystem to benefit from the relative stability of the dollar or of other stable assets. USD Coin, often referred to by its cryptocurrency ticker symbol USDC, is a stablecoin created by Centre, an organization backed by major cryptocurrency exchange Coinbase and Fintech company Circle.

• How a stablecoin maintains its stability — known as its peg — is dependent on its infrastructure.
• For example, among these assets, USDC reserves include USD-denominated Treasury Bonds.
• USDC investors generally use their holdings to earn passive income.
• USD Coin (USDC) is a digital stablecoin pegged to the United States dollar.
• Past performance is not a guarantee or predictor of future performance.
• USDC is backed by a reserve of US dollars held by Circle, and for every USDC token in circulation, Circle claims to hold an equivalent amount of US dollars in reserve bank accounts.

Currencies fixed to the U.S. dollar

To be transparent, USDC is audited by a third party that publishes information on its reserves periodically. These features mean USDC is reasonably secure both technically and financially. And when you choose to sell 1 USDC for fiat currency, the coin is “burned” when you make the transaction. The year-to-date return on Bitcoin is -35% as of this writing, for example. Meanwhile, the value of USDC has remained almost completely flat year to date.

How Does USDC Work?

As you can see from the chart above, USD Coin price has remained remarkably stable since the coin launched in 2018. Since 2018, USD Coin has reached a peak price of $1.17 and an all-time low of $0.87. Compared to other popular crypto coins, this price fluctuation is practically nothing. Centre, the consortium that manages the USD Coin crypto, releases monthly reports issued by Grant Thornton, LLP, one of the top accounting firms in the country. Its reports provide the number of USDC in circulation and the total value of the reserves backing USD Coin.

USD Coin Market Performance

Stablecoins also help alleviate other pain points such as crypto to fiat ramps, which are often slow because of their reliance on banks and financial institutions. Stablecoins such as USDC excel at transferring wealth between different platforms. They are incredibly convenient for traders too, since withdrawing a fiat currency from an exchange takes several hours or even days. In a seemingly loosely regulated space, USDC has continued to distinguish itself from other stablecoin projects by forging ties with traditional financial institutions. USD Coin (USDC) is a great digital asset to own, even if you are a newbie in the crypto space. As you have seen, it has many use cases, and you can even earn passive income with it.

• For years, the Bank of Japan (BOJ) has kept interest rates extraordinarily low to encourage more inflation in its economy, as well as to boost bank lending and spur demand.
• USDC is commonly bought with Bitcoin — and if it’s your first time buying Bitcoin, be sure to check out our comprehensive guide here.
• USDC, often dubbed the USD Coin, stands tall amid the stablecoin spectrum.
• ERC-20 is the standard for utility tokens, which serve a specific function.
• Commercial banks then decide how much money to keep in deposit with the Federal Reserve and how much to hold as physical currency.

Simply put, USDC is not a major player on the cryptocurrency market yet. However, it’s extremely popular among casual traders who value its stability, ease of use, and relative security compared to other popular coins. USD Coin’s price stability has made it a very popular option for crypto enthusiasts who don’t want to invest in riskier coins like Bitcoin (BTC) or even more speculative coins like Dogecoin (DOGE).

• Since the broker offers commission-free crypto trading, investors who want to get the best deal on stablecoin purchases could flock to Robinhood where they can buy USD Coin without any extra fees.
• Circle first announced plans to launch USD Coin on May 15, 2018, and raised $110 million.
• While not as extensive as a full audit, it still puts Centre ahead of other stablecoin operators in terms of transparency.
• Adam Carlton, CEO of crypto wallet Pink Panda, says Tether’s history of being transparent about how the coin is backed hasn’t always been clear or consistent.
• Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer.

Who Are the Founders of USDC?

One of the easiest ways to get your hands on some USDC is via the Ledger ecosystem. This way you can buy ERC-20 tokens directly with fiat currencies via an on-ramp service, and it will transfer directly to the account protected by your device. https://www.tokenexus.com/bitcoin-price-history/ That means you can skip the risk of a centralized exchange wallet powering down and leaving you without access to your assets. Users should also be aware of the regulatory landscape surrounding digital currencies and stablecoins.