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USD Coin (USDC) digital currency backed by USD assets
The USD Coin (USDC) cryptocurrency is a simple digital currency fully backed by U.S. dollar assets. The USD Coin (USDC) cryptocurrency can be defined as a tokenized U.S. dollar with the value of around one USDC Coin pegged as 1:1 to the value of one dollar.
Furthermore, the value of the USD Coin (USDC) cryptocurrency is designed to remain stable, making the USD Coin (USDC) cryptocurrency a regular coin. These stable coins are mainly backed by reserve assets like euros or dollars to achieve price stability. The price stability of these USD Coins (USDC) cryptocurrency coins contrasts sharply with the notorious price fluctuations of various other popular cryptocurrencies such as Ethereum and Bitcoin.
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What Are The Key Takeaways Of The Usd Coin (Usdc) Cryptocurrency?
- The USD Coin (USDC) cryptocurrency is a simple cryptocurrency that is backed by fiat money, making it a stable coin.
- The USD Coin (USDC) cryptocurrency reserve assets that are held in segregated accounts with the regulated financial institutions of the United States.
- The government of United States does not issue the USD Coin (USDC) cryptocurrency
Despite the name of the USD Coin (USDC) cryptocurrency, it is essential to note that the USD Coin (USDC) cryptocurrency is not backed or issued by the U.S. government. It is like an open-source project, which means that anyone can contribute and view the project’s code. This USD Coin (USDC) cryptocurrency is a digital cryptocurrency that is backed by dollar-denominated assets like U.S. Treasury securities. Furthermore, the reserve assets of the USD Coin (USDC) cryptocurrency are held in segregated accounts with regulated U.S. financial institutions. The accounting firm ‘Grant Thornton oversees all the segregated accounts and also provides monthly attestation reports.
You might be wondering as to how the USD Coin (USDC) cryptocurrency maintains the 1:1 peg with the dollar. If you start a transaction to buy one USD Coin (USDC) cryptocurrency coin with fiat currency, then that fiat currency is deposited and stored as one U.S. dollar. Also, the new USD Coin (USDC) cryptocurrency is minted. On the other hand, if you sell a single USD Coin (USDC) cryptocurrency coin in exchange for that fiat currency, the USDC currency will be ‘burned’ as the fiat money will be transferred back to your bank account.
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The USD Coin (USDC) cryptocurrency is compatible with different blockchains, as
- Ethereum
- Solana
- Stellar
- Algorand
- TRON
The center manages the USD Coin (USDC) cryptocurrency, a consortium co-founded by the cryptocurrency exchange called Coinbase and Circle, a financial technology company. This center focuses on changing the global economic landscape by connecting every financial service, merchant, person, and currency all over the globe.
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What Are The Advantages Of The Usd Coin (Usdc) Cryptocurrency?
- It has a low price volatility
- It could also be used as a hedge against inflation
- The U.S. regulated assets fully back it
What Are The Use Cases For The Usd Coin (Usdc) Cryptocurrency?
As a price-stable digital asset, the USD Coin (USDC) cryptocurrency coin can be used in different ways:
- Hedge against volatility- Investors with exposure to some other cryptocurrencies can highly reduce the volatility of their portfolios by strategically buying a stable coin like the USD Coin (USDC) cryptocurrency. Furthermore, owing to this coin during a significant market volatility period will help you stabilize a portfolio value.
- Pricing in fiat money- The digital assets are listed on the cryptocurrency exchanges can be priced in fiat money with the stable coin like USD Coin (USDC) cryptocurrency/
- Stable price pegging- The price stability of the USD Coin (USDC) cryptocurrency enabled the stable coin to represent equity ownership or the fund investments. Furthermore, the USD Coin (USDC) cryptocurrency can also describe debt or liabilities.
- Remittances- The USD Coin (USDC) cryptocurrency can be used to send some funds across the borders too. On the other hand, the recipients can store these coins without using a bank account or being concerned about the price volatility.
U.S. dollar exposure- The investors not belonging to the U.S. who wish to gain the exposure to the U.S. dollar, can also add the USD Coin (USDC) cryptocurrency to their cryptocurrency investment portfolios.
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