USD Coin Explained

By Aleksandra Wilson
2 min read August 10, 2021

USD Coin Basics

When we mention the USD Coin or USDC, we’re talking about a stablecoin that’s directly linked to the USD on a 1:1 reference. That means that for every USDC issuance, there is a backup of $1 that’s being held in reserves. That is in a blend of US Treasury bonds and cash. This currency is issued by institutions that are financially regulated. And mainly, it is thought of as a new era in which transactions without cash are more and more common daily. One of its main uses is providing a safe haven for traders that work with cryptocurrency.

About the Founders of USDC

The co-founders behind the Circle Consortium are Sean Neville and Jeremy Allaire. The project started in October 2013. The Circle Consortium has a platform for mobile payment that enables the users to send, receive and hold regular currencies. The British government granted Circle, in April 2016, the licensing of the first virtual currency. In December of that same year, it also started operating as a wallet service for Bitcoin to buy and sell the currency.

USDC
USD Coin
stablecoin
cryptocurrency

What Makes USDC Stand Out?

When it comes to cryptocurrency, transparency is one of the main concerns users have to deal with. So, them being able to take 1 USDC for 1 USD makes a world of difference in trust. To do that, an important accounting company is in charge of ensuring that the cash levels in reserve as backup match the number of coins issued. This, in combination with USD Coin, achieves compliance with regulation and helps with the plans for international expansion.

Circulation

In theory, the amount of USDC that can be issued is unlimited. The demand is what determines the number of new coins to be created, as long as it has the backup in reserve. Certain factors helped with the popularity of USDC, such as the growing interest in decentralized finance.

USDC
USD Coin
stablecoin
cryptocurrency

Security

The fact that it can be integrated with applications based on Ethereum is probably one of the most significant advantages. And as mentioned before, the currency is backed up by reserves in USD, which is mainly what makes it safe and trustworthy.

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