USD Coin (USDC) is a digital dollar, also known as a stablecoin, that is completely backed on a 1:1 basis by financial assets stored in regulated and audited U.S. financial institutions, such as physical cash, treasury bills, etc.
USD Coin (USDC) is an asset-backed stablecoin whose value is pegged to the U.S. Dollar (USD) at a 1:1 ratio.
Every USDC token in circulation is backed by $1 in cash or cash equivalents, such as short-term U.S. Treasury bonds held by regulated U.S. financial institutions. USDC has adopted the ERC-20 token standard, making it interoperable with all Ethereum-based applications. The token is now found on many other popular blockchains including Binance, Algorand, Solana and Tron.
The price predictability of USDC has allowed it to serve as a haven for cryptocurrency traders during periods of market volatility. USDC also enables a more efficient transaction of value in a stable digital currency across borders different from traditional finance.
Who Founded USD Coin (USDC)?
The Boston-based Circle and Coinbase exchange created USDC in 2018 as part of the Centre Consortium. USD Coin claims to be equivalent in value to one U.S. dollar, meaning that for every USDC in circulation, one U.S. dollar is held in reserve. In essence, the USD Coin is a service that tokenizes the U.S. dollar and makes it easier to utilize over the internet and on public blockchains.
What Makes USDC Unique?
The stablecoin market has become exceedingly crowded over recent years, but USD Coin has been able to stand head and shoulders over competitors in several ways.
One of them concerns transparency and assuring users that they will be able to withdraw 1 USDC and receive $1 in return without any issues. To this end, it says a major accounting firm is tasked with verifying the levels of cash that are held in reserve, and ensuring this matches up with the number of tokens in circulation.
Unlike some crypto ventures, Circle and Coinbase have also achieved regulatory compliance. And this has helped pave the way for international expansion. Both projects are also well-funded, giving the stablecoin certainty.