What is USD Coin (USDC)?

USDC aims to provide a safe asset from the volatility of crypto markets while enabling fast and low-cost transactions and opens doors for the asset to be used in a wide range of decentralized finance (DeFi) applications.

USDC was developed by the Centre consortium, a partnership between Circle and Coinbase, and launched in 2018. It is issued and maintained by a network of Centre’s regulated partners, who peg its value to USD by keeping an equivalent amount of USD in their reserves.

What are stablecoins?

Stablecoins are a type of cryptocurrency that provide stability among the volatility of the industry by mirroring the price of fiat. Their price is pegged to another asset and maintains its value in relation to that asset, rather than being determined by the supply and demand on the market.

There are a variety of ways that stablecoins work, and the most popular types are:

• Cash-collateralized: Maintain their value by holding an equivalent amount of fiat currency or cash equivalents in reserve.
• Commodity-collateralized: Pegged to the value of a physical commodity like gold or a digital asset like Bitcoin.
• Algorithmic: Adjust their circulating supply to maintain a stable value, increasing or decreasing the number of tokens in response to market demand

For USDC, new tokens are issued per users’ demand, with a certified financial institution backing them by locking the same amount of US dollars in storage.

Who’s behind USDC?

USDC is issued by Circle.

Founded in 2013 by Jeremy Allaire and Sean Neville, Circle initially aimed to change the way we view peer-to-peer fiat payments. In 2015, they secured New York's first "BitLicense," a significant step in their journey to provide digital asset services. While they explored various cryptocurrency offerings, including a wallet and investment platform, Circle ultimately focused on stablecoins.

This focus led to the launch of USDC on Ethereum in 2018. USDC quickly emerged as a major competitor to existing stablecoins like Tether. To expand its reach and utility, Circle launched USDC on multiple other blockchains, including BNB Chain, Polygon, Avalanche, and Solana. This multi-chain approach helped solidify USDC's position as a leading stablecoin in the cryptocurrency ecosystem.

While Circle has expanded its stablecoin offerings with the Euro Coin (EURC) in 2022, USDC remains a cornerstone of their business. Its widespread adoption and integration across various platforms highlight Circle's success in providing a trusted and reliable digital dollar for the global crypto economy.

How is USDC issued?

The process through which US dollars are turned into USD Coins is called tokenization.

In order to receive USDC, you first need to send a corresponding amount of USD to the Circle, who custodies the asset and mints USDC on your behalf. Then, the newly issued USDC is delivered to your wallet while your US dollars are held in the issuer’s reserve.

To ensure the stability and trustworthiness of USDC, Circle maintains full reserves of fiat currency held in segregated accounts at leading financial institutions. These reserves are kept separate from Circle's operating funds, providing an additional layer of protection for stablecoin holders. Reinforcing their commitment to transparency, Circle has published regular reports on their reserve assets since 2018 and filed disclosures with the SEC in 2021 and 2022.

Technically, there are no hard limits on how many USD Coins can be issued as USDC has no max supply (contrary to Bitcoin and cryptocurrencies). Instead, the USDC supply is determined by how much USD people decide to tokenize.

Importantly, when you are ready to redeem your dollars, you can send USDC back to Circle who will burn the tokens and return your funds. This means that each USDC is always redeemable for one dollar.

USDC use cases

USDC is a versatile cryptocurrency used to change how money is used and transform how we engage with the crypto ecosystem.

Cross-border Transactions

USDC can be used to send money across the world in minutes, for a fraction of a dollar in fees. This enables the stablecoin to be used for remittances, international trade and many online payments.

Decentralized Finance (DeFi)

Thanks to its stability, USDC is an important tool in the DeFi world. For example, it can be used for:

• Trading: USDC is often used to settle trades and to keep earnings in a more stable currency on decentralized exchanges like Uniswap, Curve, and Jupiter.
• ending and borrowing: Depositing USDC can help users earn rewards or use it as collateral to borrow other cryptocurrencies. Popular platforms like Aave, Compound, and MakerDAO support USDC.
• Yield farming: Maximize returns by participating in yield farming strategies that use USDC liquidity pools.

As the USDC ecosystem continues to expand, its use cases will only become more diverse and innovative. This versatile stablecoin is poised to play a crucial role in shaping the future of finance and the digital economy.

How to buy USDC?

You can buy the USDC coin on Bitstamp. Sign up for a Bitstamp account and start trading USDC today!

• Buy USD Coin (USDC) with Euro EUR
• Buy USD Coin (USDC) with USD Dollar
• Buy USD Coin (USDC) with USDT
• Buy USD Coin (USDC) with Bitcoin BTC
• Buy USD Coin (USDC) with Ethereum ETH

Disclosure: Bitstamp is licensed to engage in virtual currency business activity by the New York State Department of Financial Services.

USDC essentials

• A stablecoin pegged to the US dollar with a 1:1 exchange rate.
• Intended for easy use over the internet and public blockchains.
• Issued through tokenization by exchanging US dollars for USDC using an Ethereum smart contract.
• Backed by US dollars in storage with Circle’s accredited partners.
• As a stablecoin, it has no hard limits on how many can be issued.