USD Coin

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This article is about the cryptocurrency. For United States coinage, see Coins of the United States dollar.
USD Coin
CodeUSDC
Development
White paper[1]
Initial releaseSeptember 2018
Websitewww.centre.io/usdc
Block explorerEtherscan.io

USD Coin (USDC) is a digital stablecoin that is pegged to the United States dollar. USD Coin is managed by a consortium called Centre,[1] which was founded by Circle and includes members from the cryptocurrency exchange Coinbase[2] and Bitcoin mining company Bitmain,[3] an investor in Circle.[4] USDC is issued by a private entity and should not be confused with a central bank digital currency (CBDC).

Circle claims that each USDC is backed by a dollar held in reserve, or by other "approved investments", though these are not detailed. The wording on the Circle website changed from the previous "backed by US dollars" to "backed by fully reserved assets" by June 2021.[5]

The tokenization of the US Dollar into USD Coin happens in a three-step process:

  1. A user sends US dollars to the coin issuer's bank account.
  2. The issuer uses a USD Coin smart contract to create the equivalent amount of USD Coin.
  3. The newly minted USD Coins are sent to the user and the substituted US dollars are held in a reserve.

The redemption of USD Coins for US Dollars follows the process listed above but in reverse.

USDC reserves are regularly attested (but not audited) by Grant Thornton, LLP,[3] and the monthly attestations can be found on the Centre Consortium's website.[6]

Although USDT is more widespread and adopted, USDC is generally considered the safest alternative amongst the centralized USD-pegged stable coins due to higher transparency, increased interoperability and improved legal framework.[7]

History[]

USDC was first announced on 15 May 2018 by Circle,[8] and was launched in September of 2018.[9]

On March 29, 2021, Visa announced that it would allow the use of USDC to settle transactions on its payment network.[10]

As of December 2021, Circle states that there are 42.5 billion USDC in circulation.[11][12]

See also[]

References[]

  1. ^ Kharif, Olga (26 September 2018). "Circle Joins Ranks of Stable Crypto Coins With Dollar Token". Bloomberg News. Archived from the original on 6 June 2020. Retrieved 6 June 2020.
  2. ^ Geron, Tomio (11 June 2019). "Why Stablecoins Stand Out in the Cryptocurrency World". Wall Street Journal. ISSN 0099-9660. Archived from the original on 30 August 2020. Retrieved 6 June 2020.
  3. ^ a b Irrera, Anna (16 May 2018). "Circle raises $110 million, plans to create dollar-pegged cryptocurrency". Reuters. Archived from the original on 6 June 2020. Retrieved 6 June 2020.
  4. ^ Arnold, Martin (15 May 2018). "China bitcoin miner Bitmain leads $110m investment in Circle". Financial Times. Archived from the original on 9 November 2020. Retrieved 6 June 2020.
  5. ^ Venkataramakrishnan, Siddharth (9 July 2021). "Circle listing will test top stablecoin's transparency over reserves". Financial Times.
  6. ^ Centre. "Centre | USD Coin". www.centre.io. Retrieved 7 June 2021.
  7. ^ Solberg, Oskar (29 October 2021). "USDC vs. USDT: Which is the Best Stablecoin?". SOLBERG INVEST. Retrieved 4 February 2022.
  8. ^ Irrera, Anna (16 May 2018). "Circle raises $110 million, plans to create dollar-pegged cryptocurrency". Reuters. Archived from the original on 6 June 2020. Retrieved 6 June 2020.
  9. ^ Kharif, Olga (29 October 2018). "Stable Coin Backed by Circle, Coinbase Draws Most Early Demand". Bloomberg News. Archived from the original on 6 June 2020. Retrieved 6 June 2020.
  10. ^ Hussain, Noor Zainab (29 March 2021). "Exclusive: Visa moves to allow payment settlements using cryptocurrency". Reuters. Archived from the original on 30 March 2021. Retrieved 30 March 2021.
  11. ^ "Circle | USD Coin (USDC) Stablecoin". Archived from the original on 1 May 2020. Retrieved 21 April 2020.
  12. ^ "Circle | USD Coin (USDC) Stablecoin". www.circle.com. Retrieved 7 June 2021.

External links[]

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