.jpg)
He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem. Ethereum, its native blockchain, is often slow and beleaguered by bottlenecks.
Who Created USDC?
- The year-to-date return on Bitcoin is -35% as of this writing, for example.
- This issue has since been rectified due to the strong off-chain backing it enjoys.
- To be transparent, USDC is audited by a third party that publishes information on its reserves periodically.
- New coins are created in line with demand, whenever someone wants to purchase one with their humble dollar.
- With its reserves properly maintained, the USDC is expected to maintain the dollar peg.
Stablecoins are cryptocurrencies whose value is pegged, or tied, to that of another currency, commodity, or financial instrument. USDC is usually held as a stable how to buy bitcoin with cash at the atm asset by crypto traders, just like other stablecoins such as Tether and DAI. Stablecoins are useful for traders who want to have an easy way to trade cryptocurrencies for US dollars. Since USDC represents a US dollar, it’s a neat way to trade more volatile currencies, such as Bitcoin. 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.
Is it possible For USDC To Crash
USDC first launched on the Ethereum blockchain as an ERC-20 token, but has since expanded to other blockchains including Solana, Stellar, and Algorand. It can be purchased on both centralized and decentralized exchanges (DEXs). Additional benefits of stablecoins like USDC can be uncovered within decentralized applications (dApps) and decentralized finance (DeFi). USDC is used in a variety of dApp and DeFi protocols — such as Aave, Celsius Network, Compound, Dharma, OpenSea, and others.
While lending institutions require heavy collateral from how and where to buy and sell cryptocurrencies like bitcoin borrowers to offset the risk of defaults, there is no transparency or guarantee to the loans they issue. Moreover, several lending platforms have gone bankrupt of late, making cryptocurrency lending highly risky. In a nutshell, you probably shouldn’t put your life savings in USDC — or any centralized stablecoin for that matter. The risk of companies going bankrupt is a tangible one in this day and age, and if that were to happen, the stablecoin could lose its peg.
USD Coin Price Chart (USD)
You can invest in stablecoins like Tether on some of the best crypto exchanges and apps like Kraken and Coinbase. Investors should approach stablecoins cautiously because they require independent auditors to verify collateral or reserves. Most auditors are honest in their work, but the fact remains that there needs to be an auditor to verify that commodities are held.
USD Coin (USDC) is an ERC-20 token that mainly runs on the Ethereum network. Since USDC is not volatile, it works well as a payment method for goods and services. You can use USD Coin to pay for gift cards on Bitrefill, electronics on Newegg, or any other merchant that supports BitPay. USDC is commonly bought with Bitcoin — and if it’s your first time buying Bitcoin, be sure to check out our comprehensive guide here. It’s a bit difficult to give an exact number here — as in theory, the number of USDC that can exist is limitless. New coins are created in line with demand, whenever someone wants to purchase one with their humble dollar.
USDC As An Investment
It is the largest regulated stablecoin by US authorities and is a licensed money transmitter service like PayPal and Stripe. Moreover, since USDC holds short-dated US Treasuries and cash deposits within the US banking system, it’s considered a safer crypto option for many investors. Cryptocurrencies worth $2 million might be held as a reserve to issue $1 million in a crypto-backed stablecoin, insuring against a 50% decline in the price of the reserve cryptocurrency. For example, MakerDAO’s Dai (DAI) stablecoin pegged to the U.S. dollar but is backed by Ethereum (ETH) and other cryptocurrencies worth about 155% of the DAI stablecoin in circulation.
It does this by keeping one dollar or cash equivalent in reserve for each USDC in circulation. While USDC is backed, it’s important to note that the reserves do not only contain dollars. USDC was created by a non-profit consortium funded by crypto exchange Coinbase and financial technology company Circle. Its mission is to “raise global economic prosperity through the frictionless exchange of value”. To achieve this, it announced its digital dollar in May 2018, during the bear market, and launched in September of the same year.
EUR to USD – Convert Euros to US Dollars
It falls into the category of stablecoins, which are cryptocurrencies pegged to another asset. In USD Coin’s case, the asset is the U.S. dollar, and one USDC is designed to maintain a value of $1. USDC exchanges and partners are obligated to report their U.S. dollar holdings regularly. Some would argue that stablecoins are a solution in search of a problem, given the wide availability and acceptance of the U.S. dollar. Many cryptocurrency adherents, on the other hand, believe the future belongs to digital tender that is not controlled by central banks. With that in mind, four types of stablecoins, based on the assets used to stabilize their value, have been created.
On a larger scale, it makes payroll services, global crowdfunding, and donations to charity more stable and efficient. For one, USDC transfers and payments can be made anywhere in the world at extremely low costs and in just a few minutes. Redeeming USDC for U.S. dollars is just as easy as the tokenization process but in reverse order. Anyone from anywhere in the world how to buy next gen coin can use USDC as a common and recognizable unit of currency. The alternative would be quoting prices in dozens of local currencies, which would be quite confusing. Unlike some crypto ventures, Circle and Coinbase have also achieved regulatory compliance — and this has helped pave the way for international expansion.
To check USD Coin’s price live in the fiat currency of your choice, you can use Crypto.com’s converter feature in the top-right corner of this page. There’s a wide range of cryptocurrency wallets that you can securely store your USDC in. These include software wallets like the Crypto.com DeFi Wallet and hardware wallets that resemble USB flash drives. We introduce people to the world of trading currencies, both fiat and crypto, through our non-drowsy educational content and tools. We’re also a community of traders that support each other on our daily trading journey.
It is available as Ethereum ERC-20, Algorand ASA, and Solana SPL tokens that can be purchased using US Dollars on several major exchanges. Circle says there is a total supply of four billion tokens in circulation right now. It was developed by Centre, a technology project backed by cryptocurrency exchange Coinbase and Fintech company Circle.