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USD Coin - the history of one cryptocurrency

2019-12-27

About USD Coin

The modern world does not stand still and is actively developing. It would seem that only yesterday the first cryptocurrency appeared, and today it has already been successfully integrated into many areas of human life. I would like to note that the main idea of the existence of a digital currency is that it should not be backed up by real, that is, fiat, money, as well as any other assets. The market value can only be formed by the level of demand for cryptocurrency. However, for many traders, especially large investors, multicorporations and even ordinary users, simple demand is not enough, because even now many continue to consider the entire digital currency a simple soap bubble that may burst sooner or later. It is for this reason that a new type of cryptocurrency was created - stablecoin (stable coins).

Stablecoins are a new type of cryptocurrency, which is backed by some fiat money or any other asset (it can be gold, oil, etc.) and depends on their value. The introduction of such a currency as stablecoins in the cryptocurrency world is a kind of compromise between the supporters of the classical economic system and the innovators of the digital world.

Among the wide variety of both cryptocurrencies in general and a variety of stablecoins, I would like to draw your attention to a project called USD Coin (assigned exchange ticker - USDC) - a tokenized American dollar. One USDC token is equivalent to one US dollar.

The USDC digital currency operates on the ERC-20 standard and operates on the Ethereum blockchain. This cryptocurrency is as transparent as possible and operates, in accordance with US law, within the framework of controlling laws on financial activities.

This digital currency is a joint work of Circle (the development of technologies for making payments of different levels) and the Coinbase crypto exchange. The development and technical implementation was directly entrusted to the joint organization of these two platforms, which is called the Center Consortium.

The development team of this project notes that their main goal is to issue a token that can provide users with maximum security, as well as protect them from unwanted financial losses. It should be noted that many investors and users do not want to invest their savings in a simple cryptocurrency, because its rate can be extremely volatile. It is for this reason that USD Coin has an advantage over conventional digital currency.

It must be said that USDC tokens are not the very first stablecoin that was issued. However, precisely due to the fact that the project entered the world market only last year, and therefore is relatively young, it was able to absorb the best qualities of stablecoins. Among the main advantages of USDC are:

Submission to the official US government agencies that conduct financial regulation activities. This fact is very attractive for investors, because, along with pegging to the dollar rate, it becomes a guarantee of stability.
Passing audit control in the accounting company Grant Thornton, which is one of the most reliable in the world.
Efficiency of all financial transactions. Fiat bank transactions for private clients and large companies usually take a long time. The USDC cryptocurrency project can offer high speed of all transactions, maximum efficiency and complete reliability.
It should also be said that Circle issued USDC in order to guarantee maximum security for the investments of traders and depositors. During the crisis in the digital currency market, users have the opportunity to transfer their savings and investments to USD Coin. Due to the tight pegging to the US dollar rate, the holders of these tokens do not have to worry about unexpected rate jumps, the volatility of their investments and a decrease in the deposit.

It should be said that this project was supported by almost all major cryptocurrency exchanges, so it will not be difficult to buy USD Coin.

USD Coin Features

Considering any digital currency, you should definitely pay attention to its features and capabilities. Thus, USD Coin is a stablecoin that has financial and operational transparency, which is very important for users.

For example, if you need to exchange USD Coin for Fiat, you can use an application called Circle USD Coin. It should be noted that this application has absolutely all the features that users may need, including converting finances, making transactions, as well as all other actions, as in any banking system.

It is also necessary to mention that any interested bank has the opportunity to act as the issuer of the USDC digital currency. In order for a bank to take advantage of this opportunity, it needs to confirm that it has all the necessary documents that allow it to engage in financial activities, as well as meet all established FATF standards and AML policies. In addition, a good reputation in the industry and public presentation of financial statements after each quarter, as well as proof that reserves have been maintained, are essential. All issuing companies must maintain mutual exchange and redeem USDC coins from other partners if necessary.

It must be said that this project is aimed at the global level. The plans are to attract issuing banks that will be able to support the issuance of USDC coins in all currency regions of the world.

I would like to draw your attention to the clear advantages of using stablecoins over fiat money. The main convenience, thanks to which many people prefer stablecoins, is autonomy and independence from banking systems and fiat funds. It should be understood that when using fiat, even the most democratic banks will dictate their terms, which may not be entirely convenient for users. The advantages of choosing digital money over conventional ones are obvious:

USD Coin coins are stored on clients personal accounts, as well as on cryptocurrency wallets, and not on a deposit account with a bank, which quite often imposes certain restrictions on clients.
Absolutely all financial transactions are performed in a few days. Financial transfers within the USDC network are processed without any delay. It must be said that there can still be delays, but only if the network is extremely congested. However, this happens extremely rarely, and if such a situation does occur, the technical service of the project eliminates any delays and difficulties as soon as possible.
During transfers, the commission charged by the system is minimal.
The exchange of funds in banks takes place at a very overvalued rate, and the sale at a lower rate. USD Coin is exchanged at the rate that is currently valid online through Circle.
Based on all of the above, we can conclude that using USD Coin stablecoins is extremely convenient and practical. The financial system that the developers have implemented is well thought out and reliable. This approach is extremely important in the modern world, and, accordingly, opens up many opportunities for the success of the project in the future.

How is USD Coin created?

Naturally, considering any cryptocurrency, you need to know how it can be obtained, as well as how it is generally created. It must be said here that USDC mining does not exist. This token can be purchased for fiat currency in the equivalent of 1: 1 with the US dollar.

You can also get this cryptocurrency by simply exchanging or buying it on one of the exchanges where this currency is traded. It is also possible to purchase tokens for fiat. To do this, you need to deposit money into a bank account, and then transfer the address of your wallet to Ethereum, because because USDC is an ERC-20 token, Ethereum wallets are suitable for storing it. It is to such a wallet that USDC tokens will be transferred.

Is USD Coin Infinite?

It is worth noting that the USDC cryptocurrency is not infinite. And the maximum possible number of tokens is 1,000,000,000. Currently, there are over 455 million coins in circulation.

Please note that this system provides for the process of redeeming tokens. This is done through a request to the Center. After completing all the necessary checks, the tokens are burned without the possibility of recovery, and the funds are transferred to the accounts of external banks. Thanks to this system, the development team was able to ensure that the USDC issue would not be excessive.

Strengths of USD Coin
USDC cryptocurrency is a very interesting and promising project, because on the basis of this stablecoin many interesting technological solutions have been implemented that have helped the project become a leader in its field. This is not surprising as the USDC has many strengths, including:

famous partners and major investors. The USDC project is supported by both companies that work in the field of IT and digital currency, as well as large financial corporations, whose help has a beneficial effect on the project;
use in daily life. The technologies provided by the Center are used by many large Blockchain-based platforms;
increased demand due to the use of the USDC coin in successful projects of Circle;
the opportunity to exchange compromised USDT tokens for more promising USDC coins. Thanks to this decision, the project has become very popular.
In addition, I would like to say that USDC is the only stablecoin that was able to pass the re-verification of financial collateral. This fact favorably played into the hands of the project and was able to attract even more investors. Experienced traders and crypto experts agree that it is the USDC digital currency that has every chance of becoming the main stablecoin, and, accordingly, it is in this project that one should invest.

USD Coin in TOP currencies

Today, the digital currency USD Coin is ranked 21st in the cryptocurrency rating according to the CoinMarketCap website. The daily trading volume exceeds $ 224 million and the market capitalization is over $ 472 million.

Since USDC is a stablecoin, its value is equivalent to one US dollar. If the value for any reason decreases (usually by one or two cents), then this entails a massive purchase of tokens, which in turn increases the value of USDC to its previous positions. If the price of one token exceeds one dollar, then many users begin to sell it, because this price is higher than the one at which they bought. This leads to a decrease in the market value of the token. Thus, a self-regulation process takes place.

According to the development team, USDC is different from the standard understanding of what stablecoins are. The developers claim that their cryptocurrency is analogous to the US dollar in the digital realm. That is why you cannot make purchases and sales of these tokens for dollars for direct profit.

It should be noted that you will not be able to make money on the USDC rate races. It is for this reason that investing in this project for the purpose of earning money is unprofitable. Rather, it is suited to guarantee users the stability and safety of their investments. It was thanks to this decision that the USDC project gained popularity, which allowed it to break out of the TOP cryptocurrencies.