What is USD Coin?
Launched in 2018, USDC is a stablecoin pegged 1:1 to the USD. In other words, it is a cryptocurrency built so that 1 USDC is always equal to $1 USD. It was developed and controlled by the Centre Consortium which envisioned USDC as “digital money for the digital age”. The Centre Consortium is made up of two entities: Circle, a peer-to-peer payment services company, and Coinbase, a large cryptocurrency exchange. They aim to see USDC be used as cash, being accepted by as many vendors, wallets, exchanges, dApps and service providers as possible.
What makes it unique?
Stablecoins tend to be very similar to one another and seek to distinguish themselves by taking initiative in important details such as security and backing;
USDC sets itself apart by striving for transparency, to ensure this they outsource their accounting to a third party to ensure the reserves of assets are equal to the amount of USDC being issued;
Backed 1:1 by a mix of cash and short term US Treasury bonds;
USDC sets itself apart as well by being compliant with regulations, this is not an easy task particularly for stablecoins which are closely watched by regulators;
USDC and the Centre Consortium have received ample funding, which gives it a competitive edge against other stablecoins for being considered safe.
Being an ERC-20 token, USDC inherits the security of the Ethereum network. Being produced by one of the largest exchanges in the business also comes with the added peace of mind of users not having to worry as much about the integrity of the reserves backing USDC. This combination of factors has propelled USDC into one of the most popular stablecoins available. Consequently, the stablecoin market in general has burgeoned recently, with a combined market cap nearly reaching $200 Billion. This growth has outpaced the rest of cryptocurrency and DeFi, showing that the consumer demand for stablecoin products is alive and well.