Users should also be aware of the regulatory landscape surrounding digital currencies and stablecoins. “It also enables the transfer of capital across different geographical jurisdictions much faster, especially compared to traditional wire transfers,” Manoppo says. As a result, customers are able to use it as a very efficient pipe between legacy electronic dollars and digital currency dollars.” In the words of Jeremy Allaire, founder and CEO of Circle, “What makes USDC such a great product is that it’s easy to create and redeem, with seamless integration with the existing global banking system. Transaction costs are low cost, making it cost- and time-efficient to use. USDC can be transferred 24/7 and is faster to send than traditional currencies, with settlements occurring in seconds. USD Coin’s main advantage is that it enables people to buy and sell other cryptocurrencies without having to move fiat currency in and out of exchanges. To be super specific, USDC is also an ERC-20 utility token, which is standard for creating smart contracts on the Ethereum network. 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. “Digital asset market participants can interact with or acquire USDC via trading USDC denominated pairs on an exchange, or directly interacting with USDC’s issuer,” says Marco Manoppo, research director at Digital Asset Research. You also can’t withdraw more than 15,000,000 USDC at one time. You can hold down to 0.000001 USDC, although Coinbase sets a withdrawal limit of 0.001 USDC. And when you choose to sell 1 USDC for fiat currency, the coin is “burned” when you make the transaction. When you buy 1 USDC, a new USDC is minted. They help build trust in USDC, as they disclose the precise amount of actual funds backing the stablecoin. As of May 2022, Circle announced that the company would provide weekly attestation reports. dollars.Īuditing firm Grant Thornton releases USDC’s attestations. You can even view monthly reports of these reserve balances, including how much USDC is in circulation and its equivalent value in U.S. “Centre works with auditors and government regulation with a transparent and clear description of the reserves available to back the peg to the U.S. Steve Bumbera, chief operating officer of Many Worlds Token, says USDC is typically looked at as a safer stablecoin because of the degree of transparency surrounding its collateral reserves. So why own USDC? The most common use case is to purchase USDC, store it on an exchange or in a crypto wallet, and then use it to fund purchases of other cryptocurrencies. When crypto investors buy USD Coin, they expect one USDC to always be equal in value to one dollar. For every USDC token in circulation, $1 is held in collateral. To maintain USDC’s stable value equal to $1, USDC is backed by cash and short-term U.S. As the name suggests, fiat-collateralized currencies are backed by a sovereign currency, such as the U.S. USDC is backed by real assets, and is sometimes referred to as a fiat-collateralized stablecoin. The lowest trading price that USDC has fallen to within the last 52 weeks is $0.995, a slight dip below its dollar peg. Meanwhile, the value of USDC has remained almost completely flat year to date. The year-to-date return on Bitcoin is -35% as of this writing, for example. The sole purpose of this crypto is to provide a stable store of value, rather than provide an asset that, theoretically, appreciates in value over time. Stablecoins like USDC are used differently than cryptos like Bitcoin (BTC) or Ethereum (ETH), which fluctuate in price. USD Coin aims to maintain a one-to-one peg with the U.S. Stablecoins are a type of cryptocurrency whose value is pegged to another asset, such as a fiat currency, a commodity or even another crypto coin. Launched in 2018 by Centre, a consortium founded by Circle and Coinbase, USD Coin was created as a regulated stablecoin that runs on blockchain technology. USD Coin and Tether (USDT) together account for 80% of the capitalization of the global stablecoin market. USD Coin is the currently the second-largest stablecoin, with a current market capitalization of $73 billion. USD Coin is a stablecoin, and as such one USDC should always be equal in value to one dollar. As its name suggests, USD Coin (USDC) is a cryptocurrency whose value is tied to the U.S.
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