It is common for people to laud the potential of cryptocurrencies like Bitcoin and Ethereum to move value across international boundaries. Even though digital assets have been around for more than a decade, they still have a tendency to fluctuate greatly in price and volatility. As a result, their popularity, attraction, and uptake have all suffered.
That difficulty has been addressed by certain cryptocurrencies that provide a digital token equal to the US dollar. Stablecoins, which include USD Coin (USDC), are a rising class of cryptocurrency.
USD Coin has positioned itself as a more credible and trustworthy alternative to other tokens, such as Tether (USDT), which are all tethered to the dollar. Let’s take a look at how and why it’s doing so well and fast expanding its market share.
What is the USD Coin?
USD Coin is a new digital currency that is based on the value of the US dollar. It was launched in 2018. Stablecoins, if you haven’t heard of them before, are a separate kind of cryptocurrency.
Stablecoins, as the name indicates, have a fixed value. Precious metals such as gold and fiat currencies such as the US dollar are the most widely used assets for this purpose.
Stablecoins are stable because they have a central reserve to support them. They are underpinned by other assets that have universal worth, which implies their price is stable. Aside from pure cash reserves, many stablecoins also own low-risk assets like government bonds. Stablecoins can only be generated if the corresponding amount of money is already in existence.
Rewinding, a group of firms known as Centre backs USDC, a digital currency the e-wallet Circle and the bitcoin exchange Coinbase teamed together to form the Center in 2018 Second-largest stablecoin by 2021, USD Coin has a strong foothold in the top 20 cryptocurrency rankings.
Using USDC as a stablecoin allows you to move money from one platform to another seamlessly. Since purchase USDC with credit card from an exchange might take many hours or even days, they are very handy for traders.
Furthermore, USDC may be used by anybody on the globe as a common currency unit. Price quotes in dozens of different local currencies would be an unwieldy alternative.
This is why stablecoins like USDT and USDC have been so popular recently. Follow the link and find out how to buy crypto on credit card quickly and safely with Trastra.com.
Compared to other stablecoins, what makes USDC special?
There is no doubt that USD Coin is a product supported by two of the most well-known brands in the cryptocurrency and payments industry. Global regulators are a major concern for both Circle and Coinbase. Many other stablecoins lack this level of history, which is fortunate for both of these companies.
To be expected from a company that claims to be supported by “licensed financial institutions,” USDC’s operator Center, taking a look at USDC’s rivals might shed light on the significance of this assertion.
Over the last several years, Tether (USDT) has been widely criticized for its opaque working structure. In spite of the fact that Tether Limited claims to have a 1:1 reserve of all USDT tokens issued to date, the company refuses to allow an independent audit of its reserve holdings. The founders of USDC most likely saw a need in the market and jumped at the chance to fill it.
Attestations of USDC’s reserves are provided on a monthly basis as a means of promoting openness. Grant Thornton LLP, one of the world’s leading accounting companies, performs these services. In spite of the fact that it’s not a comprehensive audit, the Center is ahead of the pack when it comes to openness.
As a result, USDC is less contentious, and there are fewer questions about its reserves than there are about Tether.
