USD Coin, more popularly known as USDC, is an ERC-20 stablecoin that is pegged 1:1 to the US dollar. Each USDC created is backed by $1 in a regularly audited bank account by a consortium called Centre. Due to the nature of the audited bank account having dollar reserves for each USDC token created, this cryptocurrency serves the closest equivalent to having US dollars on the Ethereum blockchain!
What is a stablecoin?
Like other cryptocurrencies, stablecoins are secured by cryptography, making them virtually impossible to counterfeit or double-spend. The difference is that stablecoins are pegged to a single stable asset or a basket of stable assets -- like fiat currencies or gold -- making them much less volatile than cryptocurrencies like Bitcoin and Ethereum.
What is USDC for?
USDC tokenizes US dollars so they can be put in the blockchain, making them easier, and cheaper to transfer instantly. This is unlike the current set-up with US dollar transfers from bank to bank which moves slowly and involves processing fees from multiple parties.
How does USDC differ from other stablecoins?
Unlike other stablecoins, the USDC issuers must adhere to the strict reporting requirements established by the Centre. Standards of corporate governance are high, and there is an obligation by the issuers to provide full transparency, shown through regular audits. The monthly audits are done by Grant Thorton LLC, a top-five accounting firm. These audits for USDC are publicly available and can be viewed using this link: https://www.circle.com/en/usdc
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Disclaimer: The information and publications in this article are not intended to be and do not constitute financial advice, investment advice, trading advice, or any other advice or recommendation offered or endorsed by Coins.
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