USD Coin (USDC)

What is USD Coin (USDC)?

USD Coin, also known as USDC, is a de-pegged version of the US dollar that is referred to as Stablecoin in the Crypto industry. The coin is managed by Circle Inc, which is the parent company of Coinbase (a popular Crypto Exchange). Keep in mind that USDC is not issued with the assistance of official government authorities, so the price of this coin sometime might be slightly different than the actual US Dollar price. However, the company behind the platform claims that it is backed by massive reserves, so the price of USDC will always remain stable.

In order to own USDC or transfer funds from one wallet to another, you are not required to have a bank account with any centralized financial institution. The USD Coin can be bought from any popular centralized crypto exchange or DEX.

The various blockchains on which USD coins run currently include the Ethereum, Hedera Hashgraph, TRON, Avalanche, Solana, Algorand, and Stellar ecosystems.

Who Founded USD Coin?

USD Coin is the product of an initiative launched by Circle and Coinbase Global: The Centre Consortium. The Centre is responsible for managing all the operations. Although Centre is a separate entity on paper, it is also founded and managed by the members of Coinbase and Bitcoin mining company Bitmain.

The Circle is a global financial technology company that seeks to move money from one wallet to another in record time – eliminating the problems posed by the geographical location of the parties, banking hours, processing times, and even the costly fees. Whereas Coinbase Global Inc. (COIN: NASDAQ) is a cryptocurrency exchange with over 170 cryptocurrencies listed on its platform.

A partnership of the two firms above resulted in the Centre Consortium, whose team of developers is responsible for the entire technology and governing structure of the USD coin. Its official website has made it clear that its mission is to set the stage for future digital financial transactions by introducing a system of governance and standards that prioritize customer fund security and anonymity above all else.

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What is the purpose of the USD Coin?

Many other cryptocurrencies ran on the idea that they would, in time, appreciate in value; however, the USD Coin’s primary purpose is to act as a digital dollar – whose value remains at par with the US dollar’s. It can be used as a medium to store value, just like keeping your money in a savings account at a bank.

The value of the stablecoin is meant to remain the same as the fiat currency it is pegged to, meaning that you don’t have to worry about your coins losing value over the years. This is especially helpful to those living under non-US dollar jurisdictions since it provides a safe way to protect their investments’ value during economic instability. All they have to do is convert their fiat money reserves into USDC.

Moreover, USD coins securely allow transactions across borders to take place and remove the hassle of currency conversions and even transaction times since they operate at internet speed.

How does USD Coin work

The USD coin tries to maintain its 1:1 peg by storing an equivalent amount of US dollars in accounts at trustworthy financial institutions in the US. You simply send your dollars to the cryptocurrency exchange platform requesting to buy USDC. A smart contract, already in place, mints USDC equal value. After successful trade, USDC is transferred to your wallet in exchange for USD Dollars. The sent US dollar then goes to reserve for USDC to maintain liquidity. This way, there are always reserves backing the USDC floating around on the internet.

Selling USDC in exchange for US dollars will trigger a reverse reaction. The equivalent amount in US dollars is transferred to you, and your USDC is burnt – meaning that it has been effectively erased from the network and can no longer be used for transactions or store value.

How to buy USD Coin

You can own USDC today with a few simple steps.

1. Go to the official website: Open your browser, and look up Coinbase. Then click on the link leading you to their official homepage –  https://www.coinbase.com/.
2. Create an account: You will see an option to create an account or sign in to an existing one in the top right corner of the homepage. Click on that. Provide all the required details and create a password.
3. Verify your email and phone number: You will receive an email from Coinbase at your provided email address, which will redirect you to their website. Then enter your phone number when asked, and enter the code they send to verify your phone number.
4. Provide personal details: They will then ask you to provide more personal information, like your name, address, and date of birth, along with answers to a few questions.
5. Upload verification documents: Sign in to your account and upload the relevant documents to verify your identity.
6. Link a suitable payment method: The last step is to link a payment method. Please note that the list of acceptable payment methods may vary based on your country of residence.

USD Coin comparison

Below we’ve compared the USD Coin with other top-performing stablecoins: USDT, GUSD, and TUSD.

1. USDC vs. USDT

USDC has Coinbase Global Inc. and Circle to thank for its advent in late 2018. On the flip side, USDT was founded by Tether, a company based in Hong Kong, in 2014. USDT and USDC are stablecoins pegged to the US dollar in a 1:1 ratio.

However, USDT can run on blockchains, including Algorand, Avalanche, Ethereum, EOS, Liquid Network, Near, Omni, Polygon, Solana, Bitcoin Cash’s Standard Ledger Protocol, Statemine, Statemint, Tezos, and Tron. USDC coins can only be found on the Ethereum, Hedera Hashgraph, TRON, Avalanche, Solana, Algorand, and Stellar networks.

USDT has a live market capitalization of approximately over $80 billion and an estimated 80 billion USDT coins in circulation. On the other hand, USDC has a live market capitalization of around $31 billion and a circulating supply of 31 billion USDC coins.

2. USDC vs. GUSD

The Gemini Trust Company, a cryptocurrency exchange platform, launched the stablecoin – GUSD – in 2018. USDC, too was launched in 2018 by an unexpected partnership between Coinbase Global Inc. and Circle. GUSD is another example of a stablecoin, just like USDC. However, unlike USDC, it only runs on the Ethereum network.

The GUSD coin has a live market capitalization of around $400 million, while USDC boasts $31 billion.

3. USDC vs. TUSD

TUSD is a stablecoin that came into existence because of the efforts of its parent company, TrustToken (a platform that is involved in the tokenization of real-world assets). Although USDC and TUSD founders are different, it is interesting to know that both were embarked on in 2018, albeit in separate months.

Another area where both stablecoins differ is the blockchains they run on. TUSD, being an ERC-20 token, runs on the Ethereum blockchain alone, whereas, as previously mentioned, USDC is available on many more networks than just the Ethereum network.

Recorded data highlights that TUSD’s live market capitalization at the time of writing averages around $2.1 Billion – considerably lower than USDC’s $31 billion figure. The circulating supply, too, is only around 2.1 billion TUSD coins.

Comparison Table of Cryptocurrencies

Is USDC safe?

USDC being a cryptocurrency, has its unique set of risks. However, features like increased transparency and low price volatility make it a relatively safer investment. Circle, the official issuance body of the USD Coin, is legally obligated to issue monthly reports on its USDC reserves.

The reserves are held in segregated accounts monitored by Grant Thornton LLP – which is also tasked with providing monthly attestation reports on the same. You can view the latest reports online too! This makes it so that anybody can plainly see that all the USDC tokens are backed by actual US dollar cash deposits or something similar.

We Coin-Labs.com provides only objective information about USD Coin (USDC).
Therefore, we are not responsible for the investment decision in USD Coin (USDC) and the resulting loss.

USD Coin (USDC) Basics

Here are some factors that investors should consider before investing in USD Coin (USDC).

Reliability Score of USD Coin (USDC) in 2024

These are indexes mesuring the investment reliability of USD Coin (USDC) conducted by Coin-Labs.com.

The table above shows the result of investment suitability evaluation for USD Coin (USDC).
Check out how we evaluate cryptocurrencies on the crypto rating description page.

USD Coin (USDC) Price

Here are the price and recent trading volume of USD Coin (USDC). (Data of 2024-07-19 19:47:00)

Cryptocurrency Metadata

You can check the development status and social media information of USD Coin (USDC) through the links in the table below.

Where to Buy USD Coin (USDC)

Here are the top ten world crypto exchanges where traders can buy USD Coin (USDC) in 2024.

Frequently Asked Questions