HomeCrypto blogWhat is USDC? USDC Coin Explained

What is USDC? USDC Coin Explained

USD Coin USDC is the biggest stablecoin in Defi and it’s fully backed by US Dollar in this article we’re going to explain what USDC is, who created it, how it works, what is the USD coin and what my thoughts are on it.

What is USDC?

USDC often known as the us dollar coin is a stablecoin. The stablecoin is a cryptocurrency whose value is guaranteed by a real-world item, in this situation, it’s linked to the value of one us dollar. In other words, it promises to be worth the same as the us dollar. Stablecoins have a range of application cases and expand in proportion to trade volume and market cap. The stablecoin market is currently valued at more than 180 billion. With USDC accounting for 53 billion dollars of that total making it the second largest stablecoin in circulation. 

USDC is also audited by grant Thornton one of the world’s top 10 accounting companies. Transferring u.s cash to individuals and institutions can take a long time when done through banks, however, USDC combines the stability and attractiveness of the US dollar with the rapidity of cryptocurrency transactions. Aside from its various applications, USDC is often used in decentralized finance or Defi protocols. Similarly when decentralized banking and centralized lending platforms gain popularity demand for USDC rises, since the coins allow consumers to execute financial transactions without leaving the crypto ecosystem.

Who created USDC?

USDC was formed as a result of the center, a collaboration between Coinbase and circle. Coinbase is the largest cryptocurrency exchange in the united states while circle is a financial services startup supported by high-profile financial organizations such as Goldman Sachs. 

In May 2018 USDC reported that it had received 110 million dollars in venture capital funding. USDC was officially introduced in September of 2018. USDC is the first stablecoin to be issued by center consortium member organizations, which is a membership-based structure and governance plan for the growth and development of money on the internet. The circle was founded in 2013 as a way to send money fast and easily. Stablecoin circle is the driving force behind the center a consortium that develops frameworks and standards to facilitate stablecoin mainstream adoption.

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How does USDC work?

Well USDC was initially created as an ERC-20 token on the Ethereum blockchain, but it later spread to other blockchains such as stellar, Solana, and Algorand. Both centralized and decentralized exchanges offer it for sale. Due to their low volatility, USDC stablecoins make excellent payment and remittance methods. For the same reason, these stablecoins are popular among traders who want to invest profits from trading in higher volatility digital assets in lower volatility digital assets without leaving the fiat market.

The USD coin was developed to be a kind of digital money that would not be subject to extreme price swings since it works on Ethereum a programmable blockchain. As an erc20 token, it adheres to a set of programmatic requirements that developers must adhere to in order to have their tokens issued on Ethereum. 

USD stablecoin can be thought of as a form of utility token because it can be used as a substitute for dollars in the digital asset ecosystem. It means that customers can exchange it for other cryptocurrencies through an exchange. It can also be used to implement a number of decentralized financial protocols. For example, it can be put in blocky a loan institution that pays interest on USDC deposits. USDC is also worth something because of the assets that back it up it means that each USDC is backed by one dollar or an asset of similar fair value, both of which are kept in accounts with us-based financial institutions. Each coin is backed by a circle of cash and currency equivalence. There should be an equivalent quantity of dollar assets stored at the circle for every new us dollar currency produced.

People who do not have access to traditional financial systems can also profit from stablecoins like USDC because they do not need to open a bank account. Instead, USDC users simply need an internet-connected device and a wallet that supports erc20 tokens.

What is USD coin?

A USD coin is a cryptocurrency with a fixed value of one dollar. It’s held as a stable asset by crypto traders similar to Tether or USDT and DAI. USDC, unlike many other cryptocurrencies, is not mined, it is offered on numerous major exchanges such as Ethereum ERC-20, Algorand ASA, and Solana SPL tokens that can only be purchased with US dollars. The customer can also exchange the USDC for us dollars which will be sent back into their bank account. Customers with us dollar bank accounts can always redeem USDC for u.s one dollars worth.

 Ensuring a consistent price it currently ranks fifth in the world in terms of market capitalization with a live market capitalization of more than 52 billion 312 million 409,325 u.s dollars. It is presently the second largest stablecoin in terms of market capitalization with USDT being the largest.

Where to buy USDT?

USDC can be acquired on major cryptocurrency exchanges such as Binance in the same way that any other cryptocurrency can. With a limited purchase, you can choose the price you’re willing to pay, and your order will be filled once the token price reaches that price. You can also choose to place a market buy. If you require the token immediately, you can place a market order, agree to pay the going rate, and have your order filled almost instantly. If you want to trade USDC you can do so by going to Okex, Binance, or KuCoin and gate.io.


What are my thoughts on it? The main issue with USDC is that the stablecoin market is crowded with a large number of competitors, these include currencies such as USDT, DAI, BUSD, and UST. Despite being the second largest stablecoin in terms of market cap it is still far behind USDT which is of course the largest stablecoin in terms of market cap. Similarly, consumers are increasingly interested in decentralized stablecoins such as UST. 

This could herald the end of centralized stablecoins like USDC and USDT. Similarly, it suffers from the same issues as Ethereum does though it has a lot of liquidity the transaction costs can be quite expensive due to the current status of the Ethereum network. Likewise, withdrawal fees from exchanges can be rather costly. I hope you got value from this article, so I’m curious what are your thoughts on USDC leave a comment below.



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