What is USDC?
USD Coin (USDC) is a type of cryptocurrency known as a stablecoin. Stablecoins are digital currencies that are designed to maintain a stable value, which is typically pegged to a traditional fiat currency like the US dollar. USDC, in particular, is pegged to the US dollar on a 1:1 ratio, meaning each USDC token is worth one US dollar.
- USDC is a digital stablecoin that follows the value of the US dollar.
- It was introduced by the CENTRE Consortium, a collaboration between cryptocurrency firms Circle and Coinbase.
- USDC offers the transparency, security, and speed of cryptocurrencies while maintaining a stable value.
- It is widely accepted in the cryptocurrency market and can be used for a range of financial transactions.
- Circle’s Cross-Chain Transfer Protocol (CCTP) allows USDC to be locked-and-minted across supported blockchains.
When was USDC created?
USD Coin was launched in September 2018 by the CENTRE Consortium.
Who made USDC?
USD Coin was created by the CENTRE Consortium, a collaboration between the cryptocurrency firms Circle and Coinbase.
What’s the price of USDC?
The price of USD Coin is pegged to the US dollar. For the most recent price, check your Gem Wallet.
Is USDC a good investment?
As a stablecoin, USD Coin is not designed for investment growth. Instead, it offers stability and can be used as a reliable medium of exchange in the cryptocurrency market.
How does USDC work?
USD Coin operates as a stablecoin, designed to have a stable value tied to the US dollar. It’s built on the Ethereum blockchain, leveraging the security and transparency that blockchain technology offers.
- USDC is issued when a user deposits USD with a participating issuer.
- The issuer then mints an equivalent amount of USDC and delivers it to the user.
- USDC tokens can be redeemed for USD at any time, maintaining their stable value.
What is a Stablecoin?
A stablecoin is a special type of cryptocurrency designed to mitigate the volatility associated with digital currencies. It achieves this stability by pegging its value to a reserve of assets, usually a traditional fiat currency like the US dollar, Euro, or Yen. By combining the efficiency and security of cryptocurrencies with the reliability of fiat currencies, stablecoins offer a balanced financial instrument in the digital economy.
In 2023, stablecoin usage has skyrocketed, with thousands of users relying on these unique digital assets every day. Besides USDC, here are the most relevant stablecoins today:
- Tether (USDT): Issued by Bitfinex, is the oldest and one of the most widely used stablecoins. It maintains a 1:1 peg with the US dollar.
- Binance USD (BUSD): Jointly issued by Paxos and Binance, is a growing stablecoin with each unit representing one US dollar.
- MakerDAO’s DAI: An innovative stablecoin that is not backed by fiat currency, but by other crypto assets, like Ethereum or Wrapped BTC. It’s an example of a decentralized, algorithmic stablecoin.
- Liquity’s LUSD: Another algorithmic stablecoin, allows users to post collateral in ETH and borrow LUSD against themselves at zero interest.
These stablecoins offer various advantages to their users, from preserving value during volatile market conditions to enabling unique financial opportunities not available in traditional financial systems.
Key aspects of stablecoins include:
- Stablecoins are designed to minimize price volatility, typically by being pegged to a fiat currency or other stable assets.
- They offer the speed, security, and efficiency of cryptocurrencies while mitigating the risk of price fluctuations.
- Stablecoins provide a bridge between the traditional financial system and the digital economy, allowing users to enjoy the benefits of both worlds.
- They are ideally suited for transactions, as their stable value avoids the potential pitfalls of price volatility common in other cryptocurrencies.
- Stablecoins are an excellent choice for those looking to mitigate risk in the often volatile cryptocurrency market.
Circle’s Cross-Chain Transfer Protocol (CCTP)
CCTP is an innovative utility that streamlines the transfer of USDC across blockchains. It burns native USDC on a source chain and mints an equal amount on a destination chain, enhancing the capital efficiency of USDC transfers1.
CCTP outperforms the traditional “lock-and-mint” bridge method by mitigating security risks and eliminating liquidity fragmentation, thanks to the use of smart contracts. This results in a significantly improved user experience1.
Here’s a simplified overview of how CCTP works:
- USDC is burned on the source chain as initiated by the user.
- A signed attestation is fetched from Circle, authorizing the minting of USDC on the destination chain.
- USDC is minted on the destination chain and sent to the recipient’s wallet1.
CCTP enables the development of novel cross-chain applications, integrating functionalities like trading, lending, payments, NFTs, and gaming while maintaining simplicity for users1. Users can perform cross-chain swaps, make cross-chain deposits, and carry out cross-chain NFT purchases without complexities, providing a seamless experience1.
Currently, CCTP is available on Ethereum and Avalanche’s mainnets, with planned expansion to Solana and other chains in 2023. Developers can use Circle’s Attestation Service API for transmitting cross-chain messages.
How to buy USDC?
You can easily buy USD Coin (USDC) with a Credit or Debit Card through Gem Wallet. Here’s how:
- Download and install Gem Wallet.
- Tap on the buy button and enter the amount.
- Use your credit or debit card to complete the purchase.