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USD Coin Wikipedia

What is USD Coin

It does this by keeping one dollar or cash equivalent in reserve for each USDC in circulation. While USDC is backed, it’s important to note that the reserves do not only contain dollars. USDC is backed by a reserve of US dollars held by Circle, and for every USDC token in circulation, Circle claims to hold an equivalent amount of US dollars in reserve bank accounts.

What is USD Coin

As you have seen, it has many use cases, and you can even earn passive income with it. Therefore, understand them properly before buying your first USD coins. USD Coin (USDC) was launched in 2018 and is the second-largest stablecoin.

Choose a Crypto Exchange

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. Other major stablecoins pegged to the dollar include Tether (USDT), Binance USD (BUSD), and Dai. Binance USD is a similar stablecoin backed by a major cryptocurrency exchange.

Exchanges have widely different user interfaces, fees and rules. A little research can help you feel comfortable with the exchange you choose. USD Coin holders can also earn additional passive income through specialty online savings accounts designed exclusively for stablecoins. Increasing some transparency, accounting firm Grant Thornton audits those accounts and posts monthly draft attestation reports accessible to the public.

What Is USD Coin (USDC), and What Type of Stablecoin Is It?

In terms of functionality, U.S. dollar stablecoins essentially all offer the same thing. They aim to maintain a value of $1, and they work like any other digital currency so they can be transferred between crypto wallet addresses. Sometimes investors try to eke out small gains by selling USDC on crypto exchanges for a few fractions of a penny higher than $1. 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. It works with many ERC-20 compatible wallets, a long list of cryptocurrency exchanges, and has real-world use in global commerce and money transfers.

What is USD Coin

Nigeria pumps almost 1.5 million barrels of crude oil a day, making it the continent’s biggest producer. Yet this petrodollar nation faces repeated shortages of hard currency that choke its economy. President Bola Tinubu, who took office in May 2023, has moved to overhaul the country’s foreign-exchange market and attract foreign capital, but the process has been bumpy. Recent catalysts affecting the price of bitcoin include the launch last month of several spot bitcoin ETFs, which have already attracted billions of dollars in assets. USD Coin was launched in 2018 by Centre, a consortium founded by Circle and Coinbase. It was created to be a regulated stablecoin that “works within U.S. money transmission laws and regulations” while running on blockchain technology.

Introduction to USD Coin (USDC)

This reserve is meant to ensure there is a direct and auditable link between the USDC tokens in circulation and the actual US dollars held in reserve. USD Coin (USDC) is a stablecoin, a cryptocurrency backed by U.S. dollars or dollar-denominated assets like U.S. USDC’s reserve assets are held in segregated accounts with regulated U.S. financial institutions.

Department of Treasury, there is still a risk that it could be affected by changes in regulatory or legal requirements. USDC is widely used in DeFi applications, such as liquidity pools, yield farming and other decentralized lending and borrowing platforms. For investors, USDC also has the advantage of being subject to more regulatory oversight because it’s considered a stored value instrument in most U.S. states. The tokenization process ensures there are reserves backing the entire supply of USD Coin. You are now leaving the SoFi website and entering a third-party website. SoFi has no control over the content, products or services offered nor the security or privacy of information transmitted to others via their website.

What is USD Coin?

Since its launch, USD Coin even became one of the largest stablecoins in the world and even became the first cryptocurrency selected for settling Visa (V 0.18%) transactions. If you would like to know where to buy USDC at the current rate, the top cryptocurrency exchanges for trading in USDC stock are currently Binance, OKX, Bybit, UEEx, and Bitget. USD Coin is also available to trade on a number of other popular cryptocurrency exchanges, including Binance, Bitfinex, Coinbase,, Kraken, and Uniswap. To be super specific, USDC is also an ERC-20 utility token, which is standard for creating smart contracts on the Ethereum network. Once you’ve found the perfect exchange, you’re ready to buy USDC.

  • Its aim to have unwavering value, seamless transactions, and integration into the DeFi landscape could make it a cornerstone of modern finance.
  • The reserve account holds the equivalent amount of U.S. dollars that back each USDC token.
  • Circle’s USDC is a prominent stablecoin, bridging the gap between TradFi and the dynamic world of cryptocurrencies.
  • Just because USDC might be perceived as a safer, more credible port to ride out the stablecoin storm than other coins, current economic conditions should be considered.
  • Meanwhile, USDC’s value has stayed relatively stable over its life, although there may be some short-term volatility during extreme market periods, Manoppo says.
  • “It also enables the transfer of capital across different geographical jurisdictions much faster, especially compared to traditional wire transfers,” Manoppo says.