What is USDC and is it a safer alternative to Tether?

What is USD Coin

USD Coin has several use cases, largely stemming from its stability relative to other cryptocurrencies. USD Coin provides a stablе and convenient way to interact with cryptocurrеnciеs while maintaining a prеdictablе value due to its backing by U. Howеvеr,  invеstors should bе awarе of its slight pricе fluctuations and potеntial rеgulatory considеrations. It means that it is issued by a centralized authority (in this case, the Centre consortium) and is subject to the decisions and policies of that authority. Also, USD Coin is supported by major exchanges, making it easily available.

Say, for instance, you sign a smart contract that depends on the outcome of a sporting event. If this contract uses ETH for payment, your final take-home amount may vary depending on the cryptocurrency’s current valuation. A USDC-based contract, on the other hand, would naturally not fluctuate in value since the token always trades at $1. This would leave no ambiguity as to how much value you receive on the day of the contract’s execution. But before we dive into the details, let’s first understand what’s a stablecoin. Here are the top ten world crypto exchanges where traders can buy USD Coin in 2023.

How to buy USD Coin

The company quickly found its way into crypto and announced that they had acquired crypto exchange Poloniex in April 2020. You are now leaving the SoFi website and entering a third-party website. SoFi has no control over the content, products or services offered nor the security or privacy of information transmitted to others via their website.

Traditionally, Ethereum’s own cryptocurrency, ether (ETH), was used for payments connected to these smart contracts. With USDC built right into the Ethereum network, however, developers can simply reprogram their contracts to use the stablecoin instead. As for the technical aspects of the token, https://www.tokenexus.com/ USD Coin is similar to most other cryptocurrencies in that it uses blockchain technology. More specifically, it is built on top of existing blockchains such as Ethereum and Algorand. USDC’s biggest competitor, Tether, uses a similar approach and is available on even more cryptocurrency networks.

Should you use USDC?

This means their price is supported by other assets with universal value. While the first stablecoins maintained pure cash reserves, many have adopted low-risk assets such as treasury bonds as well. Either way, an equivalent amount of money needs to exist before units of the stablecoin can be minted. The US Dollar Coin was created in a joint move by Coinbase, the hugely popular cryptocurrency exchange, and Circle, a crypto finance company based in Boston.

What is USD Coin

Unlike other cryptocurrencies, whose value can be very volatile and subject to rapid fluctuations, stablecoins aim to provide a predictable value. Circle has committed to maintaining transparency and regulatory compliance in its operations, regularly publishing the above-mentioned attestation reports conducted by auditing firms. These reports verify that the number of USDC tokens in circulation What is USD Coin matches the amount of US dollars held in reserve bank accounts. This process is designed to instil confidence in users that each USDC token is indeed backed by a corresponding US dollar. The value of a stablecoin is typically pegged to a fiat currency like the US dollar. However, it currently functions on the Algorand and Solana networks, with it supporting more networks over time.

Who Founded USD Coin?

After a customer meets the Know Your Customer (KYC) identity requirements, they can link their bank account and make a wire transfer in US Dollars. That money is then converted into USDC, and the customer can use an exchange to trade it for other cryptocurrencies. Another area where both stablecoins differ is the blockchains they run on.

  • U.S. Dollar Coin (USDC) is one of the most popular stablecoins — a type of cryptocurrency that keeps its price pegged to the same price as another asset, in this case, the U.S. dollar.
  • USDC tokens are created when a user purchases them on an exchange or from a trusted issuer.
  • The circulating supply, too, is only around 2.1 billion TUSD coins.
  • The Gemini Trust Company, a cryptocurrency exchange platform, launched the stablecoin – GUSD – in 2018.
  • But in 2021, it was expanded to other blockchains, including Algorand and Solana.

Some platforms offer users interest payments in exchange for USDC deposits. Celsius and Vauld are among those that reward users for offering their USDC as collateral to be lent out to other users. It’s worth noting that there is risk involved with this activity. USDC is thought to have value because of the assets backing it. Dollar Coin created, there is supposed to be an equal amount of dollar assets held at Circle. The process will look like this on most cryptocurrency exchanges.

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