What is USDC? Beginner's Guide (2021)

 

After the wild ride of Bitcoin, some investors want more stable cryptocurrencies. Enter 'stablecoins'—tokens that are backed by real-world assets. The US Dollar Coin (USDC) is one of a flurry of such stablecoins that are worth the same as the US Dollar.

Can it help ease crypto anxiety? We find out below.

What is US Dollar Coin?

The US Dollar Coin is a stablecoin that claims to have a 1:1 value with the actual US Dollar. Essentially, that means one US Dollar Coin (USDC) should equal one real US Dollar, giving some much-needed stability in the market. Originally an ERC-20 token, it has since expanded to the Algorand and Solana blockchains.

Circle is behind CENTRE, a consortium that creates frameworks and standards to improve mainstream adoption of stablecoins.

Who created US Dollar Coin?

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. Circle is backed by several high-profile 

companies, including Goldman Sachs.

What’s so special about USDC?

The US Dollar Coin isn’t the first or even the most popular US Dollar-backed coin. That title belongs to Tether. But Tether is under intense scrutiny over the state of its finances. It once claimed to have a real dollar in the bank for every Tether in circulation, but an investigation by the New York Attorney General caused it to step back from that claim. The investigation is still ongoing.

That has led to a rise in other US Dollar-backed stablecoins that have more transparent funding and auditing processes. These include Gemini dollar, True USD, Paxos, and US Dollar Coin (USDC).

While USDC may not be totally unique compared to those competitors, here’s why it stands out from other cryptocurrencies:

• 🏛 Regulated: USDC’s parent company is a registered Money Service Business in the United States. That means it’s regulated by the government’s Financial Crimes Enforcement Network (FinCEN), which combats money laundering.
• ⚖️ Audited: USDC is audited by Grant Thornton, one of the top 10 accounting firms in the world.
• ⚡️ Fast: It can take a long time to send US Dollars to people and institutions when banks are involved. USDC offers the stability and desirability of the US Dollar with the speed of cryptocurrency transactions.