The third episode of the mini-series called Top 100 crypto-currencies continues today with USD Coin. If you want to check the previous two posts, just check them here: Newbie Quest: Understanding Stellar Lumens (XLM) and Newbie Quest: Understanding Uni(corns).
So, today, as I said, I will talk about USD Coin or USDC, another stablecoin, less famous than Tether/ USDT. If you don't know too much about stablecoins, I come with a solution: previously I wrote about stablecoins where I explained the basics. Check the previous post for more info: Stablecoins through the eyes of a newbie. I believe that USDC has a great potential in the future and if you don't decide to invest in it, at least try do to some research about what it is. I'm pretty sure that at the end of your research you'll know what to do: to give it a try or focus your money on something else.
What is USD Coin?
USDC is a crypto-coin with a stable value linked with the US dollar. In other words, USDC is a stablecoin. Basically, for every USDC issued there is 1 dollar deposited. The money reserve or the guarantee fund is composed of US dollars, but also of short-term treasury bonds, American treasury bonds.
USDC was launched in 2018. The founder of USDC is the Centre Consortium, which is a joint venture between Circle and the famous crypto-app, Coinbase.
USD Coin (known by its ticker USDC) is a stablecoin that is pegged to the U.S. dollar on a 1:1 basis. Every unit of this cryptocurrency in circulation is backed up by $1 that is held in reserve, in a mix of cash and short-term U.S. Treasury bonds. The Centre consortium, which is behind this asset, says USDC is issued by regulated financial institutions.
The stablecoin originally launched on a limited basis in September 2018. Put simply, USD Coin’s mantra is “digital money for the digital age” — and the stablecoin is designed for a world where cashless transactions are becoming more common.
Several use cases have been unveiled for the USD Coin. As well as providing a safe haven for crypto traders in times of volatility, those behind the stablecoin say it can also allow businesses to accept payments in digital assets, and shake up an array of sectors including decentralized finance and gaming.
Overall, the goal is to create an ecosystem where USDC is accepted by as many wallets, exchanges, service providers and dApps as possible.
Currently, USDC is on the 12th place according to CoinMarketCap.
It has a Market Cap of approximately $5 billions.
There is one thing worth for mentioning here, because many people ask themselves why the the value of a stablecoin is not actually a fixed one. Sometimes, the value of USDC is $0,998 or $0,997 and this fluctuation happens because the price of the USD also fluctuates against EURO, GBP and so on. In general, the value of USDC is $1.
If we look at how many USDC are on the market, the amount is pretty much similar with the Market Cap and we see that the value of a USDC is pretty much equal to $1.
The difference between the Circulating Supply and the Market Cap is given by the above explanation.
I believe that this crypto-coin will become a serious competitor for USDT. The American authorities have started legal proceedings against Ripple, DASH, Monero etc. and also USDT is involved in some legal proceedings. As long as USDC is a stable project, with a stable legal framework, with legal authorizations and everything like that in accordance with the law, I think that it will exceed USDT.
Many traders already started to switch USDT in USDC, especially that we can find USDC on Binance, Coinbase, Uniswap and so on. USDC is very present on the crypto-market.
USDC and DAI have market caps of $2.74 billion and $608 million, respectively. Yet, unlike on centralized exchanges, where tether is the go-to stablecoin in dollar-based crypto trades, USDC and DAI seem to have found their niche as the preferred stablecoins in decentralized trades.
It is possible that in a maximum of one year, if it does not reach the value similar to USDT now, it may exceed it. What I am saying now is not a piece of advice, meaning that I am not advising you to sell from USDT to USDC. These are just some findings of the current global context of the crypto market.
Personally, I think the USDC could become much more credible than the USDT. It is very speculated that USDT would not have as much money in the banks as it should have to cover all the currency issued. But it remains to be seen.
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