What is USD Coin (USDC)?
USD Coin (USDC) is a completely collateralized stable coin of the US Dollar. USDC is the gateway between dollars and crypto-currency swap trade.
The infrastructure behind CENTRE allows individuals, companies and financial organizations to share value, much like email between postal systems and text between SMS providers. The purported goal of USDC is to build a more sustainable world economy by eliminating arbitrary economic barriers.
What is the history of USDC?
The USD Coin (USDC) is a comparatively recent coin attached to the US currency. It was released in partnership between Circle and Coinbase on September 26, 2018. USDC is an option to other cryptocurrencies backed by USD, such as Tether (USDT) or TrueUSDD (TUSD).
USD Coin is a service for tokenizing US dollars and promoting their usage over the internet and public blockchains in a nutshell. Besides, at any point, USDC tokens may be converted back to USD. With the ERC-20 smart contract, the implementation of the issuance and redemption of USDC tokens is guaranteed.
Taking US dollars to the network enables them to be transferred within minutes everywhere in the world, which gives cryptocurrencies much-needed security. It also opens up fresh investing, leasing, risk-hedging and other possibilities.
Who is the Team Behind USDC?
USD Coin, a collaboration between Circle and Coinbase, is established by the Centre consortium. The Centre establishes the technologies and governing structure, while Circle and Coinbase are the first USDC commercial issuers.
Circle was created by Jeremy Allaire and Sean Neville, entrepreneurs, in 2013.
USDC is provided by controlled financial entities, supported by entirely allocated reserves and payable in US dollars on a 1:1 basis. Centre is a governance body that establishes scientific, regulation, and financial requirements for the USDC token.
All USDC tokens are consequently controlled, straightforward and verifiable. In addition, Circle is regarded as the Goldman Sachs-backed crypto startup.
Grant Thornton LLP, the number five accounting services provider, attests to the US dollar reserves for USDC every month.
What are the features of USDC?
USDC states that users will be able to use access the following features:
Be licensed to handle electronic money, such as banking, money transmission or trust charters
Have audited AML and Compliance programs that meet FATF standards
Back all tokens on a fully reserved basis and provide monthly published proof of reserves attested to by certified public auditors
Support fungible exchange and redemption of USDC tokens from other authorized issuer members
Meet other reporting and review requirements established by CENTRE
How does USDC work?
Circle ensures that a single US dollar is supported by a USDC token. Tokenization is called the method of converting US dollars into USDC tokens.
There is a three-step method of tokenizing USD into USDC:
1) A recipient transfers USD to the bank account of the token issuer.
2) To build an equal volume of USDC, the issuer uses USDC’s smart contract.
3) The freshly minted USDC shall be shipped to the customer and the replaced US dollars shall be kept in stock.
Redeeming USDC for USD is as simple as minting the token, except that it reverses the process:
1) A customer sends a request to the USDC issuer for USDC tokens to redeem an equal quantity of USD.
2) The issuer shall submit a proposal to the USDC smart contract to swap tokens for USD and to delete from circulation an equal quantity of tokens.
3) The issuer transfers back to the user’s bank account the requested amount of USD from its deposits. The customer gets the net number equal, minus all accrued costs, to the one in USDC tokens).
The issuers of USD Coin, unlike the most common stablecoin, Tether (USDT), are required to have complete disclosure and cooperate with a number of financial institutions to retain full equal fiat currency reserves.
Do you hold any USDC? Why or why not?
