What is USD Coin (USDC)?
USD Coin (USDC) is a stable cryptocurrency created by Coinbase and Circle and released by the CENTER Consortium, with an open source and transparent membership system.
USD Coin was created with Ethereum-based software development, but USD Coin is not as completely decentralized as Bitcoin or similar cryptocurrencies.
USD Coin is not open to manipulation as it works precisely by being pegged to the US dollar. Each USD Coin is collateralized with one U.S. dollar held monthly at regulated and supervised financial institutions. USD Coin, just like Tether (USD), is a cryptocurrency pegged to the US dollar. As of May 16, 2022, the total supply of USDC is 51,112,223,940 USDC.
Circle, one of the founders of USD Coin, has close to 8 million followers worldwide. This mass is an indication that the company is strong enough to increase the circulation of USDC. Looking back at the current era, Circle CEO Jeremy Allaire argues that a currency that promises low cost and high security is extremely valuable globally.
What Does Stablecoin Do?
Stablecoins are cryptocurrencies that maintain the value of your existing assets without being affected by market activity, that is, digital assets whose value is stable.
Stablecoin
For example, we can consider USD Coin. Digital is a dollar. Its value is fixed to approximately 1 USD.
ERC-20
This digital currency, which is based on and backed by the US dollar, was created to put an end to the fluctuating charts of cryptocurrencies.
You can always trade USD Coin, which has a high security level and a fixed price of 1 USD Coin = 1 USD. Companies with stable coin services can also transfer our dollars between exchanges in a very short time thanks to fiat currency (dollar, euro, etc.) stablecoins. We can also take advantage of inter-exchange arbitrage opportunities to save our “dollar” balances with stablecoins to take advantage of instant trading opportunities on the exchange. Thanks to DeFi solutions and crypto money companies, we are able to earn passive income by putting our crypto money maintains at interest. Finally, thanks to stablecoins, it eliminates the need to keep our USD balance in cash or banks.
Tether (USDT) vs USD Coin (USDC)
In the first week of May, the stablecoin economy came very close to exceeding $200 billion, but the recent crash of Terra changed everything, and the market capitalization of the stablecoin dropped significantly to $163 billion. Most of the stablecoins in the market lost the value of the $1 trading pair. For example, Tether (USDT), the largest stablecoin in existence, lost 5% of its value against the US dollar.
However, the second largest, USDC, seems to be increasing its dominance and staying stable. Tether, which was a player in controversy and litigation in its early days, has stated and documented in the past that it holds 1 USD for every 1 to 1 USDT. However, he noted that Tether is not only backed by dollars, but also by different products and assets. In short, Tether does not have 1 USD per USDT. When this issue was first announced, it created a lot of controversy and even lawsuits were filed regarding Tether’s influence on Bitcoin’s 2017 rise and price manipulation, but still the accusations could not be proven.
USD Coin (USDC) is an alternative stablecoin that Circle, a Goldman Sachs company, started producing during Tether’s most difficult times. Today, it continues to exist in the market as a joint product of Center (Circle) and Coinbase.
Recently, we have seen that the market value of stablecoins, that is, the stablecoins they produce, has increased significantly. This higher offer suggests, logically, the “dollar” they got in return. Aiming to throw a dent in these questions, and perhaps Tether, Grand Thornton presented its funds with approval and report. Grand Thornton stands out as the leading provider of services in the field of audit, tax and consultancy.
The Grand Thornton company tries to say that every USDC we produce has a counterpart. Stating that it does not support every Tether with 1 to 1 dollar, Tether continues to print 120,000,000 USDT almost every 3 days in the recent period. At this point, while market dominance is still in Tether’s hands, the company may be in trouble to maintain supply in the coming period. While Tether does not give clear information about which assets it supports, it continues with many question marks in minds.
