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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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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
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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As a price-stable digital asset, the USD Coin (USDC) cryptocurrency coin can be used in different ways:
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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