Reserves are transparently held at regulated financial institutions with published monthly attestations. New coins are minted every time someone buys or converts currency and acquires USD Coin. If that happens, a new dollar is added to the bank account behind USD Coin. Even though it’s not an investment, USD Coin is an option for a passive income stream. Through lending programs, you can easily earn an annual percentage yield of more than 5% on USD Coin.
- One of them concerns transparency — and giving users the assurance that they will be able to withdraw 1 USDC and receive $1 in return without any issues.
- Normally, the graph starts at the launch of the asset, but it is possible to select specific to and from dates to customize the chart to your own needs.
- The global crypto market cap is $2.11T, a 0.67% decrease over the last day.
- Traditional payments pass through multiple intermediaries, introducing additional cost that’s passed on to the sender.
- As one of the most popular stablecoins, it faces some challenges.
- Keep reading to understand more about USDC, including how it works and the various use cases for the digital currency.
USD Coin and the promise of programmable money
However, most investors and traders will find it easier to just purchase or trade the stablecoin on a cryptocurrency exchange of their choice, such as Coinbase. USDC is a fully reserved stablecoin, which is a type of cryptocurrency, or digital dollar. Unlike other cryptocurrencies that fluctuate in price, USDC is designed to maintain price equivalence to the US dollar. USDC is a stable store https://www.tokenexus.com/ of value that benefits from the speed and security of blockchain technology. A smart contract enables multiple scripts to engage with each other using clearly defined rules, to execute on tasks which can become a coded form of a contract. They have revolutionized the digital asset space because they have enabled decentralized exchanges, decentralized finance, ICOs, IDOs and much more.
What makes USD Coin unique?
In addition to partnering with the world’s largest asset manager, the stablecoin provider has inked other deals with big names from the world of traditional finance. In March, news broke that America’s oldest bank BNY Mellon would serve as the primary custodian of the assets backing USDC stablecoins. Meanwhile, a press release revealed that BlackRock will serve as a primary asset manager of USDC cash reserves. USDC exchanges and partners are obligated to report their U.S. dollar holdings regularly. Stablecoins achieve their stability through the backing of a central reserve. This means their price is supported by other assets with universal value.
Will USD//Coin hit 5 USD in a year?
However, every platform offers a different level of security (and a different price). One of the easiest ways to get your hands on some USDC is via the Ledger ecosystem. This way you can buy ERC-20 tokens directly with fiat currencies via an on-ramp service, and it will transfer directly to the account protected by your device. That means you can skip the risk of a centralized exchange wallet powering down and leaving you without access to your assets.
Some traders might be willing to buy USDC at the slightly higher price if they want to exchange a different currency for one pegged to the dollar immediately. Stablecoins have a variety of use cases and continue to grow in terms of trading volume and market cap. In 2021, the stablecoin market was worth about $130 billion, making USDC the second-largest What is USD Coin stablecoin in circulation. USDC provides liquidity to crypto markets and is available as an asset on several major blockchain networks, such as Ethereum, Algorand (ALGO), Solana (SOL) and TRON (TRX), to name a few. To be super specific, USDC is also an ERC-20 utility token, which is standard for creating smart contracts on the Ethereum network.
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