This allows traders from different regions to trade in a common environment. In addition to offering standardization, this approach also ensures sufficient https://www.tokenexus.com/a-history-of-bitcoin-hard-forks/ liquidity and volume — especially in the case of small, less popular tokens. USD Coin (USDC) was launched in 2018 and is the second-largest stablecoin.

• For its value relative to states’ currencies, see Early American currency.
• They aim to maintain a value of $1, and they work like any other digital currency so they can be transferred between crypto wallet addresses.
• It could also be useful as a store of value in your crypto portfolio.
• It is available as Ethereum ERC-20, Algorand ASA, and Solana SPL tokens that can be purchased using US Dollars on several major exchanges.

World’s Largest Asset Manager Shows Interest in USDC

USD Coin (USDC) accomplishes exactly this and is part of a growing class of cryptocurrencies called stablecoins. Since USD Coin maintains the same value as USD, converting from one to the other is usually a walk in the park. Some crypto exchanges, like Coinbase, allow you to quickly convert your USDC assets to USD right on the platform. You could also withdraw USDC from your crypto platform to your bank account, which should reflect in USD in your bank account. All examples listed in this article are for informational purposes only.

Introduction to USD Coin (USDC)

• Plus, the money might even take a few days to reflect in the recipient’s account, which can be highly inconvenient.
• Monetary policy directly affects interest rates; it indirectly affects stock prices, wealth, and currency exchange rates.
• Most banks have FDIC insurance that covers you if the bank collapses.
• The stability of Tether comes from its currency reserves, as the company claims to hold dollars and other assets that are equal or greater than the total number of USDT in circulation.
• However, it’s extremely popular among casual traders who value its stability, ease of use, and relative security compared to other popular coins.

Bitcoin, the undisputed king of cryptocurrencies, has a market cap of $834B. Binance Coin, another one of the smaller coins compared to Bitcoin and Tether, has a market cap of over $45B. The benefit of USD Coin being a stablecoin is also one of its downsides. Because there is no chance to have your investment “go to the moon” when you buy USD Coin, less crypto enthusiasts have bought USD Coin than other coins. Practically speaking, USD Coin being less popular than other coins means it’s less wide-accepted than other coins. Since then, it has steadily grown in usage and popularity in the US and around the world.

Images of U.S. currency and coins

The tokenization process ensures there are reserves backing the entire supply of USD Coin. Of course, your USDC is only as secure as the address you store it at. If you want to make sure your USDC is as secure as possible, the best option is to secure it with a hardware wallet. That’s because hardware wallets are non-custodial, meaning only you have access to your funds. Plus, they are also immune to online threats, meaning you can explore the web3 ecosystem without worrying about hackers accessing your USDC. The US Dollar Coin can be traded on Poloniex and Coinbase (the exchanges of USDC’s parent companies), and on other major exchanges like Binance and Huobi.

How Does USD Coin (USDC) Work?

USD Coin is widely considered to be the safer option because of its transparency. Its management has provided reports since its launch, verifying its reserves. Tether Limited, on the other hand, didn’t provide information on its reserves for years.

No matter what country you are from and the rules they may have, receiving remittances using USDC is easy. Since USDC operates on the blockchain, it benefits from the features of blockchain technology, such as the permissionless p2p transfer of assets. That means you can transfer USDC without a middleman tampering with the transaction or taking a cut of the fee.

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USDC provides liquidity to crypto markets and is available as an asset on several major blockchain networks, such as Ethereum, Algorand (ALGO), Solana (SOL) and TRON (TRX), to name a few. To be super specific, USDC is also an ERC-20 utility token, which is standard for creating smart contracts on the Ethereum network. USD Coin is the currently the second-largest stablecoin, What is USD Coin with a current market capitalization of $73 billion. USD Coin and Tether (USDT) together account for 80% of the capitalization of the global stablecoin market. Gold and silver coins have been previously minted for general circulation from the 18th to the 20th centuries. The last 90% silver coins were minted in 1964, and the last 40% silver half dollar was minted in 1970.

An October 2020 report from the G7 nations highlighted regulatory and oversight challenges around stablecoins, including market integrity, data privacy and terrorist financing. They also undermine the sovereignty of central banks, argued the G7, since they rival its ability to influence the monetary supply. USDC is usually held as a stable asset by crypto traders, just like other stablecoins such as Tether and DAI. Stablecoins are useful for traders who want to have an easy way to trade cryptocurrencies for US dollars. Since USDC represents a US dollar, it’s a neat way to trade more volatile currencies, such as Bitcoin. After the wild ride of Bitcoin, some investors want more stable cryptocurrencies.

What Is USD Coin?

It is available as Ethereum ERC-20, Algorand ASA, and Solana SPL tokens that can be purchased using US Dollars on several major exchanges. Circle says there is a total supply of four billion tokens in circulation right now. The flip side of the investment narrative is that having a digital asset pegged to a fiat currency like the U.S. dollar doesn’t make a great investment for appreciation. High Fed rates, a response to stubborn inflation, mean that American assets offer better returns than much of the world, and investors need dollars to buy them. In recent months, money has flowed into the United States with a force that’s being felt by policymakers, politicians and people from Brussels to Beijing, Toronto to Tokyo.