TL;DR
USD Coin (USDC) is a stablecoin that is pegged to the U.S. dollar on a 1:1 basis. Each coin of this cryptocurrency in circulation is backed up by $1 held in reserve, in a mix of cash and short-term U.S. Treasury bonds.
USD Coin (USDC) is a fully collateralized, stable coin that’s available to anyone globally. Launched in September 2018, USD Coin is backed 1-for-1 with U.S. dollars — but it works and trades like a digital currency.
USD Coin (USDC) combines the backing of assets, technology, and legal compliance to enable advanced features such as payments, staking and lending. The goal for this coin is to create an ecosystem that allows as many dApps and defi projects to accept this coin as payment.
Introduction
USD Coin's founding members are Circle, one of the most popular peer-to-peer payment providers in the US, and Coinbase, a cryptocurrency exchange. The consortium is open to new members.
The goal of this project was to provide a coin with the price stability needed to navigate the crypto market. In 2020, Circle and Coinbase announced major upgrades to USDC’s protocol and smart contract. The goal of these enhancements was to make it easier for USD Coin (USDC) to be used for everyday payments and commerce.
WHAT IS USD COIN (USDC)?
The crypto stablecoin market has been saturated with many projects looking to stay ahead of the field. USD Coin has set out to stand head and shoulders above other stable coin competitors in several ways. Part of the Digital Reserve’s strategy is to provide a more secure, transparent stablecoin as well as one that is more liquid by being pegged directly to the U.S. dollar.
Further, USD Coin seeks to build an ecosystem that accepts and adopts USD Coin as a payment system. It seeks to bridge the crypto world and finance world. USD Coin is ranked is the 5th-largest crypto coin with a market cap of $48 billion.
USD Coin has been issued on many protocols. However, a large percentage of the coin exists on the Ethereum network. As we can see below, the vast majority of supply exists on the Ethereum blockchain, known for its defi development and dApps.
However, with so many stablecoins why is USD Coin important.
Why Is USDC Important?
USD Coin, like many other stablecoins, bridges the gap between fiat currency and crypto. In addition to that, a large percentage of stablecoins are circulating in many different projects especially Ethereum.
Further, this coin can also provide a hedge against strong volatility that exists in the crypto market. It gives investors an easy way to protect thier protfolio while providing them with an opportunity to hold a fiat asset, but with the opportunity to trade for crypto.
Further, USD Coin owns nearly 25% share of the stablecoin market. In fact, it is the 2nd largest behind USDT.
How Does USDC Work?
The USD Coin is a perfect example of a stable cryptocurrency. The USD Coin is pegged to the US dollar, meaning that it is much less volatile than other cryptocurrencies. It is backed by USD in reserves as well as U.S Treasury bonds. The security and confidence comes with the fact that the U.S. Dollars are being held safely in the reserve.
Further, this coin can be trade in multiple blockchain including Ethereum, BNB Smart Chain among others.
Features of USDC
Some of the key features of this coin include:
1:1 Ratio
As explained above, this coin maintains a 1:1 ratio with US Dollars. For every one USD Coin there exists one US Dollar to back it up.
Price Stability
In times of market volatility, this coin can provide a safe haven from any violent market movements.
Access to Defi Projects
As mentioned earlier, this project exist on many blockchains including Ethereum. Due to this, and the fact that Ethereum houses a large ecosystem of defi projects, USD Coin has become a popular coin to trade and navigate defi with.
Use Cases for USDC
Next question to aske are what are some of the use cases for this coin. Not to worry, here we present three:
Easily Move Funds Within Exchanges
Having a stablecoin like USD Coin is like having a US Dollar only digital, faster, and allowing you to move it between exchange quickly.
Provides Traders With Instant Access To Price Stability
Imagine holding Bitcoin, but with the price suddenly dropping 10%... Then 20%... Then 30%. Ups and downs like this are normal for cryptocurrencies. USD Coin seeks to provide stability during market volatility by pegging its value to the US dollar. USD
Forex Style Trading
For individuals who like trading currencies, USD Coin is a great way to get some skin in the game. Since USD Coin is pegged to the dollar, traders can trade non-USD currencies into USD Coin when their value is high against the USD. If the local currency drops, you can cash out or even exchange it for another asset.
How To Buy USD Coin (USDC)?
You can buy USD Coin on Binance.
Log In/ Create An Account
If you haven’t done so already you can create an account with Biannce. Keep in mind Binance is a KYC platform so you need to provide some form of ID. If you have an account already you can just log in.
Search For USDC
Once logged in click on trade and search for "USDC" in the search box.
Select Amount and Buy
Once you find the token select the amount you want to purchase and select confirm the order.
Final Thoughts
USDC providers investors a place to safekeep their crypto portfolio in times of market volatility. As this coin become more widely adopted and available, the use cases for it will increase along with its volume.
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