USDC (USD Coin) is a stablecoin whose value is pegged (tied) to the U.S. Dollar. The cryptocurrency was created in 2018 by a consortium called Centre, founded by Coinbase and Circle. It is Centre that is responsible for the total value of all USDC being backed by assets of the same value. USDC was launched as an ERC-20 token on Ethereum. Today, the cryptocurrency is also available on several blockchains such as Stellar, Avalanche, Tron and Polygon.
USDC has the same function as other stablecoins, ie. to maintain a value. This is in contrast to other cryptocurrencies, which are very volatile. With a stable value, it becomes easier for companies to price goods and charge in cryptocurrency. USDC is also widely used by investors who want secure profits after selling other cryptocurrencies. On several exchanges, it is not possible to exchange cryptocurrencies for fiat, which means that stablecoin fulfills the stabilizing function.
What primarily differs between various stablecoins is how their value is kept to its peg. For USDC, this is maintained through Centre holding fiat, and other assets, at the same value as the value of all USDC in circulation. For USDC to remain at a value of one USD, it’s expected that users must trust that there is a backing for the total market value of this cryptocurrency.
Since USDC is backed by fiat, and other assets, the value of this cryptocurrency is expected to be exactly 1 USD. In reality the rate moves between USD 0.9995 and USD 1.005. During the first year, the rate was, at times, up to USD 1.04. The reason for these price movements is the availability and supply of the cryptocurrency. For example, in the event of large market movements in the crypto market, the demand for stablecoins can increase so that the price is pushed above its peg.
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About USDC: https://www.centre.io/usdc