The U.S. dollar (USDC) is a stable currency backed by the U.S. dollar, which was fully guaranteed and launched by the center in 2018. It is based on Ethereum’s ERC-20 protocol, making it compatible with all major wallets and custodians. The stable currency with the largest market capitalization as of November 23, 2020.
After Bitcoin got out of control, some investors are looking for more stable cryptocurrencies. Enter stablecoins-tokens backed by real assets. One of many stablecoins is the U.S. dollar (USDC). It is the same amount as the dollar. Created by Coinbase and the financial technology company Circle. It was originally an ERC-20 token. However, it has been expanded to include other blockchains.
What is USD Coin?
The U.S. dollar (USDC) is a fixed currency linked to the U.S. dollar. It is a new currency jointly launched by Coinbase and Circle. USDC can be used as a substitute for USD-backed cryptocurrencies such as TrueUSD (TUSD) and Tether (USDT). The coin (USDC) must be equal to the real U.S. dollar.
Dollar coins allow you to encrypt the U.S. dollar and provide it via the Internet or public blockchain. It provides stability to the market. It was originally an ERC-20 token and has now been extended to the Algorand and Solana blockchains. You can also convert USDC tokens back to U.S. dollars at any time, and the ERC-20 smart contract guarantees the issuance and redemption of USDC tokens.
The Hub Consortium is a partnership between Circle and Coinbase and developed the USD coin. All USDC issuers must report their holdings in U.S. dollars. These reports are published monthly by Grant Thornton LLP. The center developed the technology and management framework, and Circle and Coinbase were the first commercial issuers of USDC.
The circle was founded in 2013 to allow people to send money quickly and easily. It has grown to include cryptocurrencies, raised millions of dollars in venture capital, and acquired the cryptocurrency exchange Poloniex. This department is a licensed money transfer agency. This makes Circle an open financial company. Money Converters is a currency service company that must comply with federal laws and regulations in the United States. Circle has authorized partners that can provide USDC equivalents before USDC issuance.
All USDC tokens are verifiable, transparent, and regulated. The circle is also known for crypto startups backed by Goldman Sachs. The popular cryptocurrency exchange Coinbase teamed up with the Boston-based crypto finance company Circle to create the U.S. dollar. The department is supported by several well-known companies including Goldman Sachs.
What is the Working Principle of USD coin?
Dollar coins will not appear out of thin air. This circuit guarantees that each USDC token will be backed by one U.S. dollar. The token is the process of converting U.S. dollars into USDC tokens. There are three steps required to encode USDC as USDC.
- The user sends USD to the bank account of the token issuer.
- To create a USDC equivalent, the issuer uses a USDC smart contract.
- The USDC, which is newly minted, is given to the user. However, the USDC substituted are kept in reserve.
It is easy to convert USDC into USD. However, the reverse process applies.
- The user requests USDC to redeem USDC tokens for an equivalent amount.
- The issuer requests the USDC smart contract to exchange the tokens in USD for USD and to take the equivalent number of tokens from circulation.
- The issuer transfers the USD amount from its reserves to the user’s account. The net amount received by the user is equal to the one in USDC tokens. All fees are not included.
Unlike USDT stablecoins, USD coin manufacturers need to be transparent and cooperate with financial institutions to ensure that legal currency equivalents are always available.
How to Use USD Coin?
The U.S. dollar coin (USDC) is a 1:1 representation of one U.S. dollar on the Ethereum blockchain. It is an ERC-20 token that can be used in any application that supports the standard. Circle allows you to code and exchange USDC. To do this, you must register an account, verify your identity (KYC), and associate a valid bank account. The Circle USD platform allows users to perform four basic operations.
Circle USDC does not charge any fees for encoding services or refunds. However, for bank transfers that are rejected or returned in error, there is a $50 fee. All standard fees apply to Coinbase USDC transactions. The minimum redemption amount for USDC is 100 USD. Tokens will be processed within 24 hours. No minimum number of codes is required, and it may take up to two working days.
How is the US Dollar Coin made?
U.S. dollars are not mined like many other cryptocurrencies. You can use U.S. dollars to buy them as Ethereum ERC-20 tokens, Algorand ASA tokens, and Solana SPL tokens. The circuit claims that there are currently 4 billion tokens in circulation.
What is the USDC equivalent to the dollar?
When someone buys tokens from an authorized issuer, a USDC token will be generated. The issuer will generate an equivalent USDC for every dollar it receives. The money will then be refunded to the original buyer. As collateral, U.S. dollars are initially sent to the issuer as a reserve. USDC is redeemed against the issuer in the same US dollar legal tender. This ensures that every USDC token is backed by U.S. dollars and can be redeemed on a 1:1 basis.
How can I purchase USDC?
USDC tokens can be purchased directly from the issuer or traded on exchanges such as Luno. USDC tokens are not purchased directly from the issuer but a third party. However, if you wish, you still have the right to redeem the tokens from the issuer.
Where to Store USD Coin?
USDC can be stored in any Ethereum wallet and is an ERC-20 token issued on the Ethereum blockchain. MyEtherWallet and MetaMask are the most popular.