What is USDC?

USDC (USDC) is a stablecoin that seeks to mirror the value of the U.S. dollar. Each unit of this digital currency in circulation is backed by $1 held in reserve, in a blend of cash and short-term U.S. Treasury bonds. The Centre consortium, the entity behind USDC, states that this cryptocurrency is issued by regulated financial institutions. USDC was launched in September 2018 with the aim of mirroring the value of the U.S. dollar in a digital format. It aims to cater to a world where cashless transactions are increasingly common. The aim is to foster an ecosystem where USDC is accepted by wallets, service providers, and decentralized applications (dApps).

How does USDC work?

USDC operates as an ERC-20 token on the Ethereum blockchain. This means that all USDCs in circulation are actually ERC-20 tokens, which can be integrated with Ethereum-based applications. The stability of this coin is maintained by holding U.S. dollars in reserve. An accounting firm is tasked with verifying the levels of cash held in reserve, ensuring this matches up with the number of tokens in circulation. New coins are created in line with demand, whenever someone wants to acquire one with their dollar.

What are the potential use cases for USDC?

USDC seeks to serve multiple use cases. It can provide a safe haven for crypto traders in times of volatility. It also aims to enable businesses to accept payments in digital assets and seeks to impact various sectors including decentralized finance and gaming. USDC can be used for everyday payments, commerce, and peer-to-peer transactions. It also serves as an onramp to the wider ecosystem of decentralized finance, given its stability and wide acceptance.

What is the history of USDC?

USDC was launched in September 2018 by the Centre Consortium, which includes the peer-to-peer payment services company Circle. In 2020, an upgrade to USDC’s protocol and smart contract was announced, with the aim of facilitating its use for everyday payments and transactions. Over the years, USDC has seen increased use, in part due to the growing interest in decentralized finance. The Centre Consortium has continued to innovate and expand the reach of USDC, launching it on multiple new blockchains and fostering its adoption across a wide range of platforms and services.