What is USD Coin (USDC)?

USDC is a digital currency in the category of stablecoins. Pegged on the US dollar, USDC is backed by cash and the U.S. treasuries such that it always maintains a 1:1 ratio with the USD.

As a digital currency, USDC depends solely on technology and is run on the internet by advanced blockchain companies. As such, huge sums of money are transacted daily through cryptocurrency platforms with USDC within their token portfolio.

 In this article, we will discuss how USDC was created, how it works and the benefits you can expect from using them.

In October 2018, Centre consortium, a partnership between Circle and Coinbase, joined efforts in developing the USDC -price-stable crypto asset. 

This joint venture was inspired at the backdrop of two major issues with existing cryptocurrencies: high volatility and convertibility between fiat currencies and cryptocurrencies. 

Hence, Center launched the fiat-collateralized stablecoin backed with strong governance and transparency.

Since 2018, the consortium has published monthly reports that provide the number of USDCs in circulation and the total value of the reserves backing the USDC asset. These reports contribute to making USDC reliable and trustworthy.

Today, USD Coin and Tether are the most used stablecoins with high market capitalisation. Both coins have the same uses and configuration, but each of them has specific advantages. 

As earlier mentioned, both assets have similar uses and configurations as they are pegged to the US dollar. However, each exists as a unique entity, as shown below:

USD Coin is generally regarded as a safer asset due to its transparency and reliable nature. Center has been consistent in providing yearly reports that present the stakes of the platform and its reserves.  

Moreover, USD has a regulatory framework because it’s considered a stored value asset in a majority of U.S. states. This makes investors and traders rely on them for their digital money transfers on a daily basis.

And finally, USD Coin's transparency and wide use attract many blockchains like TRON, Ethereum and Solana to authorise transactions with them on their systems, and developers can swap it between all those blockchains.

On the contrary, the only leverage that Tether has over USDC is a larger market capitalisation and a higher trading volume. So, it is easier to trade Tether for other cryptocurrencies due to its trading volume.

USD Coin is a fiat-backed stablecoin issued by Centre consortium. Every day new coins are minted as people buy. When people sell their tokens in exchange for US dollars, they are removed from circulation, and new coins are minted thereafter. Generally, purchasing USDC from cryptocurrency exchanges requires you to follow the steps below. However, they may vary from one crypto exchange to another.

The process of selling USD Coin follows the same protocol as above, though in the opposite direction. The exchange platform on which you trade uses the smart contract to remove the USd Coins you are selling and pays you the equivalent amount in US dollars, which you can later convert into your local currency.

USDC can be used worldwide during and after banking hours. Commonly known as a digital dollar, it is available at any time on exchange platforms like Yellow Card. 

You only need an internet connection and a smartphone to be able to buy, sell or save your USDC. Moreover, you can also send and receive USDC from friends and family or pay for goods and services. 

With USDC transactions, no one needs to queue up and wait longer than expected to complete or receive a cash transfer. Transactions with USDC are as easy and fast as sending a text message.

Financial transactions should not be as costly as they are with such advancements in technology. It is time to save that money you pay  to complete a wire transfer or withdraw cash. Say goodbye to paying a given percentage on your huge transactions, and above all, enjoy the instant cash flow.

With USDC, you can do more than just send and receive money at cheap rates. USDC is favourable in crypto capital markets for trading, lending, borrowing, and fundraising. And there is just a myriad of other opportunities at a global scale offered by USDC.

USD Coin is a secure, transparent and reliable way to move money within and across borders without necessarily depending on third parties. With its 1:1 ratio, users are protected from inflationist tendencies and currency devaluation, especially in Sub-Saharan African countries. Finally, using USDC could be another way of making passive income through lending offers on crypto exchange platforms.