What is USD Coin?
USD Coin (USDC) is a relatiy stablecoin pegged to the US dollar. Circle and Coinbase collaborate and launched USDC on September 26, 2018.
In short, USDC works to tokenize US dollars and facilitate their use over the digital blockchains. Moreover, USDC token can be exchange to US dollar, this is done with ERC-20 smart contract.
The main advantages of USDC is that it brings much-needed stability to cryptocurrencies and also allow people to move US dollar anywhere in the world within minutes using the block chain.
How Does USD Coin Work?
USD Coins aren’t just issued out anyhow, the company Circle LTD ensures that every USDC token is backed with a single US dollar.
Tokenization: is the process of whereby the US dollars is turn into USDC tokens
Tokenizing USD into USDC in process:
- The User send a US dollar to the token issuer's bank account.
- The issuer then use USDC smart contract to create an equivalent amount of USDC.
- Then the created USDC are given to the user, while the substituted US dollars are held in reserve.
- The user then receive the USDC token equivalent to his/her US dollar.
Redeeming USDC: this is the process of changing USDC to US dollar.
This process is as easy as creating the token, except the process is reversed:
- The user want to redeem his/her USDC to US dollar, the user then sends a demand to the USDC issuer to redeem an equivalent amount of USD for USDC tokens.
- Then the issuer sends a demand to the USDC smart contract to exchange the tokens for USD and remove an equivalent amount of tokens out of the circulation.
- The issuer then sends the demanded amount of USD from its reserves back to the user’s bank account. The user receives the US dollar amount equivalent to the USDC tokens he/she redeemed.
How to Use USD Coin
USDC is an ERC-20 token and can be used with every app which supports the standard. The Stablecoin represent the US dollar in 1:1 on the Ethereum block chain.
In general the USDC stablecoin can be used:
- USDC can be used to send money instantly, globally, securely and at low cost
- It can be used to purchase items in various crypto dApps, exchanges, and blockchain-based games
- It can be used to bypass traditional financial instruments and institutions;
How to tokenize or redeem USDC on Circle LTD.
Circle USD platform allow users to perform 4 basis action:
- Tokenize USD
- Redeem USDC
- Transfering/Withdrawing of USDC Token to any ERC20 compatible Ethereum addresses
- Receiving/Depositing of USDC from external Ethereum wallet addresses
To tokenize and redeem USDC on Circle, the user need to first create an account, verify his/her identity (KYC), and link a legitimate bank account.
- Note: :Circle USDC doesn’t charge users any fees for tokenizing and redeeming of USDC and the minimum USDC redemption amount is 100 USDC. This process are done on only business working days and it sometimes takes 24 hours before the process is completed.
While there are no minimum tokenization amount, and the process can take up to 2 business days.
Where Can You Get USD Coin?
The USDC can be purchased directly with US dollar using bank account through Coinbase exchange.
The coin can also be sold back US dollar through Coinbase also.
There are also numerous exchanges that allow users to purchase USDC using Fiat or Crypto
Exchanges that allow users to trade USDC and their trading pair:
- Binance (paired with USDT, BTC, BNB).
- Coinbase Pro (paired with BTC, ETH).
- CoinEx (paired with USDT).
- Coinsuper (paired with BTC, USD).
- OKEx (paired with BTC, USDT).
- CPDAX (paired with BTC).
- Hotbit (paired with USDT).
- Kucoin (paired with BTC, ETH, USDT).
- Korbit (paired with KRW).
- FCoin (paired with USDT).
- LATOKEN (paired with BTC, ETH).
There are numerous exchanges that allow users to trade USDC with many other Crypto.
The list mentioned above are just the popular ones.
Where to Store USD Coin
Like any other ERC-20 token, USDC can be store in any Etheruem-based wallet.
Etheruem-based wallet like MyEtherWallet, MetaMask are good example of ERC-20 wallet that users can easily store their USDC token
Since it's launched back in 2018, USDC has been a very exciting project, rapidly developing with credible institutions behind it.
USDC is ranked the second most largest stablecoin by Coinmarket cap