USD Coin or USDC for short, is a stablecoin created by a group of companies called Centre.
It’s a digital stablecoin pegged to the United States dollar, which means that USDC is designed to have the same value/price as 1 USD. Each USDC is backed by a single dollar held in reserve, and with a market cap of $2.5 billion, USDC is regarded as one of the fastest-growing, fully reserved digital dollar stablecoins.
A little bit more detail
USDC was launched in September 2018 as a collaborative effort between Circle and Coinbase. It’s governed by Centre, who sets technical, policy and financial standards for stablecoins.
USDC tokenises US dollars and puts them on the Ethereum blockchain as an ERC-20 token. This allows for the smooth movement of money anywhere around the world within minutes, and also serves to provide stability in a market known for its relative volatility.
In addition to this, USDC opens up new opportunities for trading, lending, risk-hedging and more, similar to other stablecoins.
While USDC is pegged to the US dollar, it can trade at a premium, or at a discount, depending on demand for it. The price of USDC is based on supply and demand. For example, it could trade at slightly higher than 1 USD, because it’s more liquid and more easily transferable than ordinary dollars - if there’s a sufficiently high demand for it.
Tip
Not exactly sure what a stablecoin is? No problem. Find out more about stablecoins.
This information is not intended to be nor does it constitute financial, tax, legal, investment or other advice; nor is it a call to trade. The information is intended as general market commentary for information purposes only. Before making any decision or taking any action regarding your finances, you should consult a qualified Financial Advisor.