Cryptocurrency is a highly volatile asset in the financial market. However, stable coins such as the USDC and USDT have become exchange-traded intermediaries that traders can use in the same way as Fiat. Stable coins have been able to create a degree of stability for traders and bring them into the world of digital currencies by attracting and encouraging people.
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Tether (USDT) was the first stable coin to enter the market and therefore, it became very popular and with the conquest of market value, it was among the top 5 currency codes. Then came the USDC, which removed the ambiguity of the stability around the Tether.
What is USD Coin (USDC)?
USD Coin (USDC) is a relatively new stable coin that is pegged to the US dollar. Launched on September 26, 2018 in collaboration with Circle and Coinbase. USDC is an alternative to other USD-backed cryptocurrencies such as Tether (USDT) or TrueUSD (TUSD).
In short, USD Coin is a service to tokenize the US dollar and facilitate its use on the Internet and public blockchain. In addition, USDC tokens can be converted to USDa at any time. The issuance and redemption of USDC tokens is guaranteed by the ERC-20 smart contract.
Bringing US dollars to the blockchain allows you to move them to anywhere in the world in minutes, bringing much-needed stability to digital currencies. It also opens up new opportunities for business, lending, risk coverage and more.
History of USDC cryptocurrency
This cryptocurrency was launched in 2018 in collaboration with Coinbase and Circle. The circle was founded in 2013 by Jeremy Allaire, Sean Nevilleand two other entrepreneurs. The USDC crypto, like its predecessors, intends to address two key concerns about existing digital currencies. Excessive fluctuations and conversions to digital values and currencies.
Unlike Tether, the project was born out of the recognition that the crypto market needed a stable coin with Fiat collateral and strong sovereignty and transparency. USDC seeks to address these concerns by issuing 100% Fiat stock tokens on CENTR.io, as well as providing the correct rules and procedures for creating and repurchasing USDC. Consortium Center members must adhere to important membership and operations standards such as licensing, compliance, technology and operations, accounting, and maintenance of Fiat reserves in order to become a distributor.
Circle and Coinbase announced significant progress in the USDC protocol and smart contract in 2020. The purpose of these enhancements is to facilitate the use of USD Coin for day-to-day payments and peer-to-peer transactions.
How does USD Coin (USDC) work?
The USDC currency is like a programmable dollar that is used 24 hours a day, 7 days a week for large and small payments. The Stable coin is pegged to the US dollar one by one, and its market cap is clearly visible in a public record. In addition, the USDC developer, Circle, stores the dollar backup of the USD Coin.
USD Coin (USDC) itself is actually an ERC20 token operating on the Ethereum network. Today, USD Coin transactions can also be made on the Algorand, Solana, and Stellar networks. The USDC stable coin was recently launched on the Tron blockchain.
As the payment process is made easier in the second version of USDC 2.0 (USDC 2.0), Ethereum Network’s fee is also paid directly in USDC. In addition, USD Coin is integrated into many cryptocurrency exchanges, wallets, Defi apps, and other related platforms.
USDC currency blockchain supporters
Initially, the USD Coin (USDC) was used as an ERC20 token for payments, lending, investing, trading and finance. On the Ethereum network, stable coin integrates with decentralized finance programs, and millions of users and hundreds of millions of dollars worth of USDC are locked into digital wallets, exchanges, Defi protocols, savings accounts, loans, and payment services. Today, however, the USD Coin is not limited to Ethereum and is available in a variety of blockchains. Along with Ethereum, USD Coin (USDC) has achieved speed, scalability, and cost-effectiveness through the third-generation Algrand, Solana, and Stellar public chains.
On the Algrand Network, USDC operates enterprise-level applications through on-chain transactions that provide near-instant clearing of accounts in 5 seconds. In this network, the throughput of transactions is 1000 tps (transaction per second) and the average commission is about one-twentieth of a cent.
In the Solana network, the USDC supports up to 50,000 tps, and transactions are finalized in 400 milliseconds. Also, large decentralized financial system projects are currently being integrated with the Solana network.
On the Stellar network, the USD Coin reaches speeds of thousands of tps, and transactions are finalized in 5 seconds. This network is optimized for payments and its fees reach a fraction of a cent. The network is also optimized for hundreds of exchanges and wallets.
What is special about USD Coin (USDC)?
The US dollar coin is not the first or even the most popular US dollar-backed coin. This title belongs to Tether. However, Tether is heavily monitored for its financial situation. He once claimed to have a real dollar in the bank for every tether in circulation, but the New York Attorney General’s investigation led it to back down. The investigation is ongoing.
This has led to an increase in other US dollar-backed stable coins with more transparent financial and auditing processes. These include the Gemini Dollar, the Real Dollar, the Pexus, and the US Dollar Coin (USDC).
Although the USDC may not be completely unique compared to its competitors, here is why it stands out from other digital currencies:
The parent company USDC is a US-registered monetary services business. This means that it is regulated by the Government Financial Crimes Enforcement Network (FinCEN), which fights money laundering.
The USDC is audited by Grant Thornton, one of the top 10 accounting firms in the world.
Sending US dollars to people and institutions can take a long time when banks are involved. USDC provides stability and usefulness of the US dollar with the speed of digital currency transactions.
The USDC digital currency can be considered one of the best stable currencies in the crypto market. The reserves that USDC Coin has to support its currency code are completely legal and transparent, and you can be very comfortable about that.
Of course, you should know that USDC is a centralized stable coin that can freeze your capital due to the possibility of tracking its tokens, and one of the most important drawbacks of Tether and USDC or any other centralized stable coin is that they have to proceed according to international rules. To work with them, so working with them can have limitations that authentication is one of those limitations that will be a little problematic compared to decentralized coins that do not have this limitation.