What is USD Coin (USDC) in simple words

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2019-09-04 00:00:00:

USD Coin is a cryptocurrency (you can read more about what a cryptocurrency is ), which is better known by the name USDC. It is presented in real dollars, but digitally. In the crypto world, such a currency refers to stablecoins - a coin that depends on fiat money and its rate. Many traders are accustomed to using Tether, since there is a peg in the price of the dollar, which simplifies transactions with real funds and helps to monitor the profitability of cryptocurrency assets. As a result of a number of negative factors and a weak reputation of the creators, traders and investors began to look for other options for stablecoins. USD Coin turned out to be one of the best in popularity.

What is USD Coin (USDC)

First of all, you need to understand what USD Coin is in order to accurately understand the features and scope of the coin. Cryptocurrency represents a standard type of stablecoin, the main difference between such digital money is in exchange rate fluctuations that are not associated with Bitcoin (you can read about this cryptocurrency on this page ) and other coins. In addition, USD Coin is one of the newest and most useful funds of this kind. The official date of creation and market launch is October 2018. The coin is pegged to the US dollar.

A few basic facts about USDC:

The project is a joint work of 2 companies, including Coinbase and Circle. However, the development of the cryptocurrency was carried out by their subsidiary Center Consortium.
The creators of the digital currency did not use their own blockchain to work, so they took the Ethereum platform as a base, all USDC tokens under the ERC-20 standard, but the situation may change in the future.
The developers claim that the coin has several differences in comparison with the standard stablecoins. They argue that digital money is considered a complete analogue of US dollars, so USDC cannot be bought or sold for USD in order to generate income. It is possible to use direct conversion in a 1: 1 ratio. However, many analysts note the fact that the coin is relatively young, so it is not worth talking about 100% work according to the specified algorithm yet.

Looking at the coin from the technical point of view, it cannot be said that it has anything special. There are interesting facts about the creators themselves, listing on the stock exchange and other data, but it does not have anything significantly new. Analysts say this has both advantages and disadvantages.

USD Coin is a web application suitable for purchasing and using USDC tokens, which give full stability. The project is made on an open source framework.

Today, cryptocurrencies are becoming more important than fiat money, many people use them to make payments, conduct transactions and other operations, ordinary trade. The stability of the price allows you to be confident in the coin, because the rate is similar to the dollar, but it provides a number of advantages, including the ability to use the blockchain system.

Coin developers provide:

Full financial transparency, which is supported by the reporting of independent auditors.
Carrying out activities in accordance with all the laws of America.
The work is carried out together with banks and other partners by auditors.
The system is open source.
The participation scheme is open.

The main purpose of its creation is the introduction of a new token to improve the safety of traders and investors, and to reduce the risks of asset loss. This is achieved by being pegged to US fiat money, while other cryptocurrencies are subject to strong volatility.

History of USD Coin (USDC)

The history of USD Coin begins with the developers of the cryptocurrency, the creation of the coin was carried out by Circle Internet Financial Ltd together with Center. During the creation of the project, for its successful implementation, a partnership was concluded with some giants in the field of cryptocurrency. Circle is a dedicated cryptocurrency trading platform that hit the market in 2013. This exchange performs payments based on the blockchain. Transactions are carried out without commissions all over the world. The main activity of the organization is financial transfers via the Internet. The main motto of the company is that money works like the Internet with openness, freedom and ubiquity with maximum protection against theft.

Circle provides 4 of its own products:

Invest is a project for investors who are just starting their journey in this field of activity. Suitable for people who want to invest in cryptocurrency, not only in-house developed USD Coin, but also in other assets.
Pay is a special system for performing financial transfers, made to work with digital and real currencies. The creators assure that the main goal is to provide a platform that will help to get access to the largest circle of people. Performing any monetary transactions, they say, should be as simple as sending a letter through the mail.
Trade is a tool for trading cryptocurrency assets, but the platform is not considered an exchange, it acts more as an exchange for buying or selling coins.
Poloniex is the purchase of Circle, which is a powerful crypto-exchange with impressive turnover. The main difference from other products of the company is the purchased platform, and not created in-house.

With all 4 instruments, the USDC coin is actively promoted in the market. The developers continue to constantly develop the token. Circle itself, prior to the acquisition of the Poloniex exchange, was part of a group of large companies in the cryptocurrency market.

The Coinbase exchange, which is recognizable in different parts of the world, also took part in the creation of USD Coin. It was she who first provided the announcement on the release of the asset on 10/25/2018.

Among the major partners, the well-known manufacturer of mining equipment, Bitmain, is distinguished. The company is also the worlds largest digital currency mining pool. The management of the organization was interested in the development of stablecoin, as a result of which the firm became the main investor in the project. $ 110 million was invested in the development of the Center.

The developers also signed partnership documents with other cryptocurrency giants. The main ones are:

Tusk Ventures;
IDG Capital;
Blockchain Capital;
General Catalyst.

More than $ 3 billion was invested in the project. For the creation of the coin, there were several events that became predecessors. Among them is the USDT token used on the Poloniex exchange. The coin could not fully cover the needs, requests and functions of the classic stablecoin, as a result of which it could not become an alternative to real assets. The main difficulty lay in the platform used, it did not allow for a normal financial audit and did not show data on the banking organizations that served the coin.

The developers of USD Coin assure that their token works completely transparently, because Center is the main regulator. It is licensed and also affiliated with partner banks with many dollars in their accounts. In addition, an independent company was selected for the audit, which conducts inspections every month. In 2019, on January 15th, a coin check was done, showing that it was indeed backed by fiat money, so the USDC can be trusted.

Distinctive features of USD Coin

Initially, when issuing USDC, the developers were aimed at traders who want to get a stable value of a coin to work and exit trading positions, as well as token creators who want to tokenize different contracts. For the latter clients, it is important to obtain stability in the value of the coin, and not to link the tokens to Bitcoin or Ethereum.

By issuing USDC, users have received a service that allows them to perform any financial transactions around the world. For work, clients need to provide KYC data. According to the terms, there are no limits on token ownership, but they may appear in the future. It is possible to use cryptocurrency on any crypto exchange that supports the ERC-20 standard and store it on wallets with similar compatibility.

Like other stablecoins, the essence of the coin is to reduce the volatility of the exchange rate of other digital currencies, which can improve the accuracy of investors predictions. This is what lies at the heart of the USDC.

A distinctive feature is the creation of a coin as a replacement for Tether. It is safer, more honest, and all the alternative options cannot provide such transparency and financial results after the audit, since they are located in offshores that are not controlled by the relevant authorities. Analogs have unknown partners, closed code, and operate in a closed system. USDC has eliminated all the disadvantages described, there is open reporting on transactions and security, the work is carried out in accordance with US laws.

The work is based on the ERC-20 algorithm, which makes it possible to save money for the creators, because there is no need to make new software. Clients themselves can continue to use standard wallets to store, sell and buy tokens.

It is impossible to mine the coin , the emission is carried out only when real dollars are deposited into the reserve.

How USD Coin works

The main purpose of the creation of USDC was to offer a new token with a stable exchange rate, which is not exposed to the main coins of the cryptocurrency market (we wrote in detail what the cryptocurrency market is ). The creators believe that this makes it possible to carry out any financial transactions as quickly as possible with the proper level of security. Thus, dollar transfers are used anywhere in the world with a minimum commission.

Due to the appointment, new opportunities appear in trading on stock exchanges, lending, and potential risks of financial transactions are reduced. The coin is able to have a significant impact on the growth of large transactions. With the help of a token, a convenient system for payments is created, which has no time frames, limits on the amount of transactions. However, it is still impossible to say with certainty and predict the rate of formation when the cryptocurrency will be able to work without interruption anywhere in the world.

How USD Coin works is extremely simple:

since the coin is considered a token made according to the ERC-20 standard, there is support for digital money by any wallets for Ethereum;
you can buy USDC by depositing dollars into a bank account, and then provide the address of the wallet for storing Ethereum, where the USDC will be transferred in an equal rate to American fiat money;
USDC withdrawal to real funds is performed in reverse order, the main connection to the Internet;
the issuer makes the required number of coins, providing them to the client for further use;
tokens are used for any financial actions.

Based on the above, we can make a small conclusion, the Circle has created a convenient tool that simplifies the execution of financial transactions related to the deposit and withdrawal of real funds. Based on the companys promises, USD Coin will be issued according to banking standards.

Advantages and Disadvantages of USD Coin

Similar to other coins in the digital currency market, USD Coin has its own advantages and disadvantages. You should initially study all the positive aspects, first of all, attracting investors, and not fans of storing cryptocurrencies. Main pluses:

The team of token creators has extensive experience and excellent funding. She has been and works in the cryptocurrency field for many years, so clients and investors have more confidence.
The project is backed by several major partners and sponsors, and the main achievement of the coin developers is partnerships with giants in the world of cryptocurrencies. Among them, Bitmain stands out - the main partner that played an important role in promoting USD Coin, and also acts as the most famous manufacturer of mining devices. Goldman Sachs Group is an investment bank associated with fiat and cryptocurrency assets. Baidu is a search engine organization. IDG Capital is a venture capital firm.
The coin quickly appeared on well-known and large exchanges, at a time when other tokens and stablecoins have problems with listing on crypto exchanges. USD Coin almost immediately after entering the market was available on the Coinbase and Poloniex exchanges, on the latest platform, the coin was traded without commissions until the end of 2018 with favorable conditions.
Analysts believe the token is more reliable than other fiat-backed cryptocurrencies, including Tether (USDT).
The financial work is completely transparent. It is known that all coins that are backed by fiat funds do not have the opportunity to pass full verification, which causes a number of negative opinions and criticism. There was especially a lot of negativity in 2018 with the breakdown of agreements between Tether Limited and Friedman, hired to audit and verify the developers company statements. Circle assures that financial statements are reviewed every month and the data is published in the public domain. The audit is carried out by the independent organization Grant Thornton.
The cryptocurrency has an open source code, so any trader or investor can check it to make sure that there are no failures, violations and software fraud.
Compliance with all laws. There is information that the developed stablecoin fully meets the requirements of the United States for the operation of such an asset. All principles are observed, meet legal and legal norms.
Possibility of third-party issuance, since the coin operates on an open source platform, under certain conditions there is the possibility of self-emission of the coin, which will be backed by the euro and other real money (EURC, JPYC or GBPC). The work for users will be with any tokens in one system, where a crypto exchange, wallets, organizations and banks capable of working with stablecoins are used as a basis.

Summing up, we can say that the coin is promising, supported by strong support from various organizations, and we can also count on the future of USD Coin and its development. However, cryptocurrency is not ideal, so there are several disadvantages to highlight:

The original idea is completely absent, as USDC is not the first fiat-backed coin to try to replace real dollars with digital ones. In addition, other analogs, after creation and work, began to face many problems. Tether is a great example. At the moment, there is no exact data on how the USDC will manifest itself, whether the developers will be able to eliminate the problems inherent in stablecoins.
There is a high degree of competition, because there are many such assets on the market and USD Coin will need to be significantly different or have significant advantages to bypass it.
The reputation of the coin itself and its creators is controversial. There are many reviews from traders and investors where developers are accused of fraud, especially a lot of negativity goes towards technical support. On the other hand, a number of clients are satisfied with the work of the programs that are created by the company.

Since the coin is relatively new, users do not know how it will work in a few years, whether it will be able to remain in demand in the financial and digital world, and whether developers will have the opportunity to offer new ideas.

How to buy or sell USD Coin?

USDC has significant advantages over other tokens, which are backed by real money. Among them are the absence of problems with listing, wide distribution and transparency. At the moment, the token is traded on more than 20 major exchanges, where you can exchange USD Coin and other financial transactions.

In addition to exchanges, the company offers other options for buying coins, which are made as separate services for financial transfers:

Invest is a tool for investors who need to transfer fiat money to cryptocurrency;
Pay - an application for transferring digital and real assets;
Trade is an analogue of an exchange for working with digital funds.

The coin is as affordable and easy to use as possible. You can buy it on the official Circle website after registration. You can become an owner of USDC on other exchanges:

Coinbase;
Poloniex;
BitFinex;
Binance;
CoinEx;
DigiFinex;
Korbit;
Liquid.

Having created an account on the official website, the user is verified according to the rules of the company. After successful registration and profile update, you can link your account, transfer dollars. At the time of admission, an automatic conversion into cryptocurrency is carried out in equal proportions.

In the cryptosphere, the Binance exchange is often used, which makes it possible to trade Bitcoin, altcoins and other tokens, as well as buy and sell them. The purchase process through the crypto exchange is as follows:

Initially, you need to complete the registration procedure to obtain a profile. After that, a letter with a link is sent to the email address, by clicking on it, the procedure will be completed.
After logging in, the system makes an offer to connect protection via SMS or two-factor authentication, but you can refuse these services.
On the exchange, you need to replenish your account with cryptocurrency.
After that, buy USDC by choosing a token and paying for it through Ethereum or Bitcoin. After specifying the amount, confirm the actions, the whole transfer operation will take up to 1 minute.

Working with other exchanges is about the same, some offer a purchase only for cryptocurrency, and some of the exchanges work with fiat funds. It is convenient to store coins on them, but the degree of security is not the highest.

The sale of a token is carried out with the receipt of fiat funds or for cryptocurrency. To exchange USD Coin for Fiat, it is recommended to use the Exmo, Korbit, Indodax exchanges. They give minimum commissions and maximum coin value. The cheapest way to sell will be on the Crex24 exchange.

You can exchange USDC for altcoins or other coins on exchanges. The most popular cryptocurrencies to exchange are WETH, Bitcoin, XRP , Ethereum. If you do not take into account the volume of trade, then the most expensive is to sell a token through DDEX, Hotbit, OceanEx, and cheaper is Radar Relay.

As an example, consider selling through the main page https://www.alfacashier.com/. The instruction is extremely simple:

You need to choose the main direction, selling USDC with a transfer to BTC.
Read the information on the website in detail before starting the exchange operation. The course on the site is always clean, excluding commissions and other payments. After creating an application, it is fixed for 15 minutes, and if the payment is not executed, it is updated. Customers may receive an individual discount after registration. Any cryptocurrency transactions take up to 10 minutes.
In a new window, enter the amount of the coin you want to receive. In the described case, it is Bitcoin, but you can enter a value for the sold coin so that the system will automatically calculate the results.
The email address is provided to confirm the sales order, but the line may be blank. Additionally, the address of the wallets is entered where the token is stored and where the new coin will be transferred. The data can be saved on the site after authorization to speed up new financial transactions.
Now all the conditions of the resource are accepted, the captcha is entered and the button for sending the application is pressed.
The payment menu will open showing the USDC amount.
After receiving the funds, the page is automatically refreshed, the client receives a notification that the payment has been made, but confirmation is needed on the blockchain.

Using the exchange through the Binance exchange, the token sale process will be as follows:

On the main page, go to the assets section and press the withdrawal button.
Select "Select Withdrawal Coin".
Indicate the address of the USDC wallet and the number of coins to be exchanged.
The total cost will be calculated automatically with the system commission.
If the trader uses verification, then in addition a security code is entered that is created on the smartphone.

The funds are credited within a few hours, but more often the operation takes up to 30 minutes.

Sale and purchase can still be done through various exchangers . They have handy calculators that will show how much cryptocurrency or real money you can get when exchanging USDC. The services are proven and reliable, the user can choose the one that will have the best exchange rate. Often, operations on them are performed manually by operators, so transactions can take a certain amount of time.

You can buy USD Coin cryptocurrency in our service. Here are the most popular buying directions:

The sale is popular for the following boards:

USD Coin to ruble rate

The average daily rate of USD Coin to the ruble is 67.23 rubles per coin, and over the last 24 hours as of 08/31/19 the price increased by 0.1343 rubles. At the moment, capitalization in fiat currency is 30509091495240 rubles.

Rate USD Coin to dollar

Since the coin is considered a standard stablecoin, the change in asset value is independent of other cryptocurrencies. The price is directly related to the US dollar, the token itself is its counterpart. As of 08/31/19, the USD Coin rate to the dollar is exactly $ 1, which gave an increase of 0.03% per day. The daily turnover of the asset was $ 82597758.

The creators of the token have simplified currency conversion as much as possible, therefore, after the dollar account is replenished, it is automatically generated into cryptocurrency.

USD Coin to Euro

As of 08/31/19, the USD Coin rate to the euro is 0.91 per 1 coin, and this gave an increase of 0.04% per day. The daily volume of the asset is 74892500 euros.

Where to store USD Coin

As mentioned earlier, you can store USD Coin on any wallet that supports ERC-20 technology. Among the most popular and demanded in the cryptocurrency environment are:

MyEtherWallet - this wallet allows you to store Ethereum and tokens, including stablecoins. The application is browser-based, so you dont need to download it to work. The main advantages of the wallet are that it helps to carry out any transactions using blockchain technology and is not considered a storage medium per se. Among the shortcomings, there are frequent attacks by scammers and hackers.
Coinomi is a wallet that can store about 200 tokens. It is designed as an application for smartphones under different operating systems. The platform supports even rare coins, has powerful encryption and a high degree of security. The main drawback is the lack of a browser or other version.
Mist - acts as the official storage location for Ethereum with the ability to execute smart contracts . The program is characterized by ease of use, a high degree of protection due to the use of multisignature. Among the disadvantages is the need to allocate a large amount of memory for desktop storage.
Coinbase Wallet is a special wallet of one of the developers of the USDC token.
Exodus is a multi-currency cryptocurrency storage facility with over 100 coins, among them there are tokens backed by fiat money.

Among cold wallets, the Ledger and Trezor variants are recommended. They provide USD Coin via MyEtherWallet.

How much USD Coin total

It is important for every trader or investor to understand how much USD Coin there is at the moment. According to information from https://coinmarketcap.com, the market cap is $ 453,838,278 , but there are 452,415,235 coins in circulation.

Issue USD Coin

The main regulator of token emission is Center. The company complies with laws and licenses for conducting electronic financial transactions, works with banking organizations and other partners who keep fiat money as a reserve. The Founders provide an opportunity for auditors to assess USDC reserves every month.

Circle emphasizes that the token is the first of all possible stablecoins that is able to remove all artificial boundaries for cryptocurrencies and real money, which will improve market efficiency.

Compared to other fiat-backed cryptocurrencies, USD coin is the most efficient tool. After replenishing the wallet for $ 1000, users automatically receive 1000 USDC. They can be transferred, sold or sent to the exchange for trading. The conclusion is the same, when 700 USDC is withdrawn, the same amount of dollars is transferred to the balance.

With the help of the official website for the token, the client can perform verification, for which it will be necessary to indicate passport data, photo, information about the place of residence, as well as a mobile number and email address. The process takes 5-10 minutes, after which the purchase of coins from $ 5 is available, which automatically confirms the account. To simplify the work of traders and investors, a mobile application has been created for the token.

Currently, only the developers, Circle, have the rights to issue in the CENTER structure. The market cap according to https://coinmarketcap.com is $ 453,838,278 .

How USD Coin is backed

USD Coin is a cryptocurrency made on the basis of Ethereum using ERC20 technology. The coin is backed by real currency - US dollars, according to the developers, the audit of the fiat reserve is carried out with the help of a large company Grant Thornton LLP. On April 30, 2019, the report published data on the total number of coins and the reserve. The cash and the number of coins have an excellent balance. The stock of real funds is slightly larger than the issued token.

The very value of the Circle company exceeds $ 3 billion, which is 6 times more than in 2016, even before the release of the cryptocurrency. The coin rate is always stable, deviations are minimal, so traders and investors dont have to worry about volatility. The token has all the advantages of digital money, the work is transparent.

USDC is a coin that acts as a digital analogue of the American dollar, but with the ability to use it on the Internet with a minimum commission, maximum speed and a high level of security. The token provides ample opportunities for an ordinary consumer or business, regardless of geolocation.

USDC is stable, but it is precisely this fact that is being criticized in the cryptocurrency space. This is due to the fact that the coin is completely under the control of issuers, which violates any requirements for the decentralization of digital money .

The future of USD Coin

As a conclusion for all the information provided, it should be understood what the future of USD Coin is. The coin has all the possibilities and high chances of becoming the best stablecoin, which will take out of the market analogues - USDT (Tether) and TUSD (TrueUSD).

Based on the results of Skews analyzes, the coin is gradually gaining popularity, according to CoinMarketCap, it is in 23rd place in the TOP 100 cryptocurrencies (the information is relevant at the time of this writing). The developers themselves have an excellent platform that can help make all plans come true. The opportunities of large partners and investors are used for work.

The USD Coin coin has all the advantages of the blockchain, full compliance with the legislation and standards of banking organizations. It provides ample opportunities for investors; they are also available for traders. The token can be used to fix income within the exchange.

Center plans to form a vast ecosystem that will operate with a single digital currency, available anywhere in the world. However, experts have only one question - what will happen to the coin during the next crisis, a sharp drop in the dollar. This is the main problem of the coin, which is provided with real money, and it is almost impossible to solve it.

Another problem is verification on a platform that violates the rules of cryptocurrencies. After all, the user will not be able to fully maintain confidentiality; many investors and depositors do not like this. However, a big plus is the ability to use the digital dollar with almost no commission for transfers anywhere in the world. All transactions are carried out in a matter of seconds, providing a significant role for traders and investors. If USD Coin can actually knock Tether out of the crypto market, then we can confidently talk about reliability and prospects.

The stability of the exchange rate and the provision of real assets can only be created by the capacity of the system, in the operation of which third-party resources will not interfere.

Considering the coin as a vehicle for investment and its perspective, one should initially remember about the relative novelty of the token. It is difficult to talk 100% about the best and worst qualities in comparison with analogs, so any predictions for the future will not be reliable.

Its hard not to say about the partnership with the giant Bitmain, which made a significant contribution to the token. With the help of a mining equipment manufacturer, CENTER will be able to launch a number of stable quotes in various geo-currency boundaries. As a result of close cooperation since the creation of the coin, one can judge the promising future.

In comparison with other tokens, the described asset has never experienced problems with listing on crypto-exchanges. The asset was almost immediately added to many platforms and became an affordable tool for traders. The rate is assessed by analysts as stable, so there is excellent support with fiat funds.

The main disadvantage is competition in the cryptocurrency market, as well as the lack of global novelties for USD Coin.

USD Coin is an interesting coin backed by the US dollar, but its prospects are not clear. No increase in asset value is foreseen, but the reputation of the creators leads users to doubt. Experts advise against investing in this cryptocurrency for a long-term period, and for traders the token will become an excellent, stable tool.