USDC is a representation of the U.S. dollar on the Ethereum blockchain.
USDC is a type of fiat-backed (fiat = government issued money) stablecoin with its value pegged to the U.S. dollar. At any given time, a single USDC can be redeemed for $1 U.S. dollar with the issuer. As a programmable currency, it can leverage the power of blockchains. As a stablecoin, it has steady value.
USDC is based on Ethereum
USDC is built on the Ethereum blockchain and follows the ERC-20 token standard, although it will be issued on other blockchains as well. Ethereum is a market-leading smart contract platform and a mainstay of the DeFi movement. It enjoys strong support from developers and makes a solid foundation for USDC.
Redeemed through CENTRE members – Circle and Coinbase
USDC is presently issued and redeemed via Circle and Coinbase, both members of the CENTRE Consortium. You can exchange USD to USDC at a guaranteed 1:1 rate through Circle or Coinbase. You also have the option to redeem or buy on other exchanges, although the market rate can be above or below 1 U.S. dollar per USDC. Members of Linen App are able to buy and sell USDC within the app.
What is the CENTRE Consortium? It’s an independent entity – founded by Circle and Coinbase – and is essentially in charge of governing USDC. The company holds U.S. dollars and equivalents in reserves backing USDC coins in circulation. It supervises the rules and regulations regarding the issuance and redemption of USDC. It also ensures that issuers are legally compliant.
USDC offers several advantages
Why do you need USDC? There are multiple benefits to owning and using the currency.
1. Utilizes the power of blockchains
USDC enjoys all the advantages of being an Ethereum-based currency. Settlement times on the blockchain are in near-real-time, leading to faster transactions.
2. Offers reliable value
USDC is fiat-backed and pegged 1:1 to the U.S. dollar. The fiat reserves are attested monthly by the accounting company Grant Thornton. Unlike other cryptocurrencies, you can rely on USDC having stable value.
3. Earn yield on Compound through Linen App
You can potentially earn a yield on any USDC you own by depositing it to Compound via Linen App. The yield can vary and has ranged from 0.1-6% APY in the past.
USDC can be used in a variety of financial applications and services. The makers created USDC to be a global dollar, allowing exchange of value between people, businesses, and smart-contracts. Over $1 billion USDC are in circulation as of July 2020. The currency is still in its nascent stage but has proven to be in demand by DeFi market participants.