USD Coin works by backing each issued USDC token with a corresponding US dollar held in reserve by trusted financial institutions. The cash reserves (USDC Circle Reserve Fund) are held at The Bank of New York Mellon and managed by the world's largest asset manager, BlackRock. When someone buys USDC, the equivalent amount in US dollars is deposited into a bank account. This ensures that USDC can always be redeemed for one US dollar, providing the stablecoin with stability and reliability. USDC is built on blockchain technology, meaning transactions are transparent, fast, and can be verified by anyone with access to the blockchain. USDC is primarily used as an ERC-20 token minted on the Ethereum blockchain but has now expanded its compatibility to over ten different blockchains. USDC is used for applications in decentralized finance (DeFi), as well as for traditional payments.
USD Coin was created to address the need for a stable and reliable cryptocurrency. Traditional cryptocurrencies like Bitcoin and Ethereum are known for their volatility, making them difficult to use for everyday transactions or as stable stores of value. USDC offers a solution by combining the advantages of blockchain technology, such as speed and transparency, with the stability of the US dollar. This makes USDC an attractive option for both investors and users seeking a stable and reliable cryptocurrency.
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Circle's website: https://www.circle.com/en/usdc
USD Coin’s white paper: https://f.hubspotusercontent30.net/hubfs/9304636/PDF/centre-whitepaper.pdf
USD Coin on Wikipedia: https://en.wikipedia.org/wiki/USD_Coin
USD Coin on Investopedia: https://www.investopedia.com/usd-coin-5210435