What Is USD Coin USDC?

Many other meme coins, like Dogecoin (DOGE), dogwifhat (WIF), and BOOK OF MEME (BOME), are listed alongside Pepe Coin in the Crypto.com App. On X (formerly Twitter), the team came clear on what happened, but the token’s value only recovered with another announcement made in October. PEPE is an ERC-20 token on the Ethereum blockchain, with a maximum supply of 420,690,000,000 tokens. The team states on the official website that Pepe Coin is a 100% decentralised and 0% tax meme token, and 100% of its liquidity is burned. For intermittent trading and daily use though, USD Coin is certainly one of the most trustworthy stablecoin options out there.

This was confirmed by Circle in July 2020 when it froze $100,000 of the stablecoin at the behest of law enforcement. Since USDC is a great method of exchanging value across borders, it also has a unique positioning in terms of remittances. To explain, political or economic instability in some countries makes receiving funds from friends and family members challenging. Using USDC, there are no hidden costs such as exchange or service fees.

Understanding USD Coin

Also, being issued by Centre, a consortium founded by Circle and Coinbase, has helped USDC gain wide adoption and create a network effect in the cryptocurrency ecosystem. Since its launch, USDC has seen significant growth, with its market cap surpassing $30 billion in early 2022. Its widespread adoption and regulatory compliance have made it a popular choice for individuals and businesses. If it works the way it’s supposed to work, any USD Coin you buy will be worth the same amount in one year, five years, and so on.

• This passive income method carries much greater risk, but you could earn a larger return.
• Tether courted some controversy over the reserves backing the stablecoin.
• To be transparent, USDC is audited by a third party that publishes information on its reserves periodically.
• Unlike other cryptocurrencies, whose value can be very volatile and subject to rapid fluctuations, stablecoins aim to provide a predictable value.
• It is available as Ethereum ERC-20, Algorand ASA, and Solana SPL tokens that can be purchased using US Dollars on several major exchanges.

It has also faced legal troubles related to its lack of transparency, with a lawsuit alleging that unbacked Tether issuances caused $1.4 trillion in damage to the crypto market. However, each has advantages over the other, so they’re not entirely interchangeable. Founded in 1993, The Motley Fool is What is USD Coin a financial services company dedicated to making the world smarter, happier, and richer. While USDC’s value is based on the value of the U.S. dollar, Bitcoin’s value is derived from its limited supply. If you’re keeping score, currently, there are roughly 19 million Bitcoins in the marketplace.

Vulnerable to Price Fluctuations of the United States Dollar

Its design enables stable monetary value to move globally from a crypto wallet to other exchanges, businesses, and people without an intermediary. The details of the introduction to USDC Coin showcase an impression of the benefits they can offer. For example, you can notice the evident benefit https://www.tokenexus.com/ of safeguards against price volatility in crypto. Similarly, the easy-to-use UI and features of USDC make it easier for almost everyone to use stablecoin. Speaking of exposure to the US Dollar, the outline of “how does USDC work” must also reflect on the ease of cross-border payments.

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). USDC tokens are created when a user purchases them on an exchange or from a trusted issuer.

Who created US Dollar Coin?

Unlike other cryptocurrencies, whose value can be very volatile and subject to rapid fluctuations, stablecoins aim to provide a predictable value. The introduction to USD Coin or USDC is incomplete without reflecting on the reasons for introducing the stablecoin. Was USD Coin developed with the sole objective of dealing with price volatility? As a matter of fact, the underlying reasons behind creating USDC also focus on the sophistication of systems alongside the volatility in cryptocurrency market. The sudden changes in asset prices can be quite challenging for new investors. On the other hand, stablecoins such as USDC can offer a credible store of value alongside avoiding the volatility evident in cryptocurrencies.

Therefore, it falls under the ambit of the US Government’s Financial Crimes Enforcement Network or FinCEN, which focuses on fighting off money laundering. Another important highlight in the discussion what is USD Coin draws the limelight toward the creators of the stablecoin. The founder of USDC, Circle, launched the stablecoin in September 2018 with the support of the crypto exchange, Coinbase. Another notable partner of Circle in creating USDC is Bitmain, which helped Circle in garnering a $110 million initial investment.

What sets USDC apart from other stablecoins?

USD Coin (USDC) has emerged as a popular and reliable stablecoin that provides stability and reliability of fiat currencies while leveraging the advantages of cryptocurrencies. Its wide use cases, including trading, payments, lending, savings, and decentralized finance, make it a versatile and widely adopted stablecoin in the cryptocurrency ecosystem. However, price volatility in crypto makes them a risky asset for investors.