Coin Profile: USD Coin
The USD backed stablecoin powering global use cases.
Overview
USDC is a stablecoin, launched in October 2018. It is backed by fiat currency and was created by the CENTRE consortium, a partnership between Circle and Coinbase. The goal was to create stable cryptocurrencies and network protocols. This was to address two major problems in existing cryptocurrencies: high volatility and the lack of convertibility between fiat and cryptocurrencies.
USDC was created to offer a stablecoin with strong governance and transparency. Circle publishes a monthly public attestation of 100% reserves of fiat tokens on CENTRE.io to achieve this. Additionally, CENTRE members must adhere to key membership and operating rules. These rules include licensing, compliance, technology & operations, accounting, and custody of fiat reserves.
History
USD Coin is a stablecoin. It is backed by fiat currency.
It was launched in October 2018 by the CENTRE consortium. This consortium is a partnership between Circle and Coinbase. The goal was to create reliable cryptocurrencies and network protocols. These protocols would address two major problems in existing cryptocurrencies: volatility and the ability to exchange fiat and cryptocurrencies.
The coin was created with the purpose of offering a stablecoin with strong governance and transparency. Circle publishes a monthly attestation of 100% reserves of fiat tokens on CENTRE.io. In order to achieve this, CENTRE members must follow certain membership and operating rules. These rules include licensing, compliance, technology & operations, accounting, and custody of fiat reserves.
Circle: The Issuer
Circle is the sole issuer of USD Coin. The CENTRE consortium was created to create price-stable crypto assets and network protocols. Circle is managing the day-to-day operations of the stablecoin and issuing tokens.
Circle's centralized issuance model ensures users have access to transparency and accountability. This is because Circle must hold 100% reserves of the corresponding USD and USD treasuries in publicly reported accounts. This helps maintain the ecosystem's stability and reliability as a digital currency. This is crucial for its success in replacing traditional fiat currencies in the cryptocurrency world.
Blockchain Availability
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Common Questions
Explore answers to frequently asked questions surrounding the token.
How do I build with USD Coin?
There are several ways to use USD Coin. It depends on a person or organization's needs and the purpose they intend to use it for. One way to use the token is to integrate it into dApps and other blockchain-based services. These services include payment gateways, lending platforms, and remittance services.
Cybrid is a platform that offers various tools and services. It helps developers and businesses incorporate blockchain technology, like USDC, into their products and services. Specifically, Cybrid offers APIs and UI SDK components that developers can use to create applications that support USDC transactions.
Can I attach USD dollar accounts?
Cybrid offers services to create FBO USD cash accounts. These accounts are linked to USDC on- and off-ramps, as well as a digital wallet infrastructure.
It is possible to attach USD dollar accounts to USDC. This allows users to make payments and take advantage of other opportunities within the cryptocurrency ecosystem. Cybrid has arranged and integrated all the necessary vendor relationships, agreements, and licenses. This ensures a smooth process for users.
What's the speed and cost of a transaction?
Transaction speed and cost can vary. Factors include network congestion, gas fees, and transfer method. However, in general, USDC transactions are known to be fast and relatively inexpensive compared to other cryptocurrencies.
Polygon, Algorand, Solana and other chains are increasing in popularity. They offer low cost and fast transactions compared to Ethereum mainnet.
USDC transactions have gas fees associated with them. These fees are paid to Ethereum miners to validate and process transactions. Gas fees can fluctuate depending on network demand.
At Cybrid, we have distilled the complexity of gas fees into a manageable solution for you and your user. Book a demonstration to learn more.
What currency pairings are there?
Cybrid offers USDC offramp to convert to 140 local currencies, and as a USDC onramp from over over 40 local currencies. To learn more click here.
An "onramp" refers to the process of converting fiat currency to crypto, whereas an "offramp" is crypto to fiat currency. Cybrid offers services that enable users to incorporate fiat<>USDC features and functions into their products. This gives users more convenience and flexibility when utilizing USDC for payments or other purposes.
Is USDC a cryptocurrency?
Yes, USD Coin (USDC) is a type of cryptocurrency (or virtual currency) known as a stablecoin. This is a digital asset. Its purpose is to maintain a stable value, which is pegged to the US dollar at a 1:1 ratio.
USDC is built on the Ethereum blockchain as an ERC-20 token, which allows for fast and secure transactions with minimal fees. Unlike other cryptocurrencies, USDC has the stability of the US dollar backing it. This means that any pricing discrepancies in the open market will be quickly arbitraged, avoiding the same volatility as other cryptocurrencies.
Check out our blog post "What is a stablecoin?" for additional information.
Is USD Coin a Central Bank Digital Currency?
No, USD Coin (USDC) is not a Central Bank Digital Currency (CBDC). CBDCs are digital currency versions of fiat currencies. They are issued and regulated by a central bank.
USDC, on the other hand, is a stablecoin issued by a private company, Circle. USDC is backed by US dollars held in reserve accounts which are subject to public reporting. However, it is not connected to a central bank's monetary policy or regulatory framework. Instead, USDC's stability and governance rely on the transparency and accountability of Circle and the CENTRE consortium, which developed the stablecoin.
What does it mean that Circle is the Sole Issuer?
Circle is the "sole issuer" of USD Coin (USDC). This means that Circle is the only entity in charge of creating and distributing USDC tokens. This is in contrast to other cryptocurrencies that may have multiple issuers or decentralized issuance models.
From time to time, you may spot an announcement about Circle USDC moving from one blockchain to another. This process is known as "burning" tokens on one chain and "minting" them on another. The same general principle happens whenever Circle converts a USDC <> USD, minting and burning tokens as required to maintain 100% reserves.
What is a wrapped USDC?
A wrapped USD Coin is a tokenized version of USDC. It is a token that represents an amount of USDC held in reserve by a custodian. The custodian takes possession of the original USDC and mints a token to represent the value of the underlying asset.
The process of "wrapping" USDC, known as tokenizing, involves locking up the original USDC in a smart contract. An equal amount of the wrapped USDC tokens is then issued on the Ethereum blockchain. Tokens can be used in a variety of ways within the ecosystem. For example, they can be used in decentralized exchanges (DEXs) and other decentralized finance (DeFi) applications.
An example of wrapped tokens at scale is the Aptos network. USDC issued there are from custodians such as Wormhole and LayerZero.