Not long ago, just about a couple of months back, we had reported that Coinbase and Circle had collaborated to launch the brand new USD coin.
Given it’s a new entrant in the market that has backing from a rather important crypto exchange, we figured you would want to know all about this coin.
In this article, we clear out for you what it is, how it works and much more.
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What is the USD Coin?
USD is a stablecoin launched by the Coinbase exchange and crypto finance firm Circle.
A stablecoin is basically a cryptocurrency that is pegged to, and therefore backed by, a reliably stable fiat currency. USD is only the ticker symbol for this coin, originally called the USDC coin.
Like Tether, it is backed by the US Dollar at a 1:1 ratio. This basically means that one USD coin will always be of the same value as one fiat USD. The entire point of having a stablecoin is to escape the roller coaster volatility most crypto coins are usually exposed to.
According to its official website, USD coin is described as :
“Crypto with a stable side.”
The website further explains:
“With USDC, you can move dollars anywhere in the world in minutes instead of days. Cheaply and securely. The tokens bring stability to crypto, opening up possibilities for trading, hedging risk, lending and beyond.”
USD is essentially an ERC-20 token created on the Ethereum blockchain as a part of a blockchain smart contract.
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Why Would You Use the USD Coin?
The USD Coin can be used to tokenize the fiat USD or actual US Dollars so that they may used for various kinds of blockchain-based transactions. People who hold USD coin can not only enjoy its stability but also use it as an intermediate currency to be able to use fiat USD for blockchain-oriented services.
According to the launch announcement on the Circle blog:
“Price-stable tokens are foundational requirements for enabling powerful new global financial contracts, products, and services on the internet.”
Where Can You Buy the USD Coin From?
The following is a complete and updated list of exchanges where you can purchase USD Coins from for your use:
If you wish to get the USD coins directly from the official website of Circle, that is also a fairly simple process.
You just need to sign up to create a new account first. This account will then be screened as per the relevant compliance rules Circle plays by. Then, you can simply link your bank account to your new Circle Account to transfer the requisite amount of fiat USD funds. Once that has been received by Circle, an equivalent number of tokens, in a 1:1 ratio will be transferred to you. Later on, you may easily choose to have these tokens converted into fiat USD and transferred to your bank account.
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