USDC is a stablecoin that is backed by the U.S. dollar. What does this mean? Well, it means that U.S. Dollars are converted into tokens on a 1:1 ratio and then stored in smart contracts, which are collateralized with liquid assets or cash deposits on an ongoing basis to guarantee the stability of the token’s value relative to the USD. You can use USDC as a store of value, transaction medium, or unit of account!
Buying USD Coin: What You Need to Know
USD Coin is one of the most well-known stablecoins, and for a good reason: it has a lot going for it. Unlike most cryptocurrencies, USD Coin does not have much value as an investment vehicle. The only exclusion to that rule is if you live in a nation where the U.S. dollar is considerably more steady than the local currency.
Regardless of the method, obtaining USD Coin is straightforward if a local exchange supports a trading pair for it. Binance, Coinbase, Kraken, Kucoin, and Huobi are just a few notable platforms that trade USDC. It’s also worth noting that you may trade your Tethers for USDC on many exchanges.
You can trade USDC for USDT or other stablecoins on various cryptocurrency exchanges.
The vast majority of USDC coins are produced on the Ethereum blockchain. It is easy to take self-custody, and any Ethereum wallet can do so as well. As usual, our go-to recommendation for safe crypto storage is to invest in a robust hardware wallet. If that fails, consider using one of our top smartphones or P.C. software wallets.
What is a USD Coin?
USD Coin is a stablecoin with a value of $1 per coin, and it was developed by Centre, backed by cryptocurrency exchange Coinbase and Fintech company Circle.
Because it’s always worth $1 and is extremely safe and secure, at least in crypto terms, keeping USDC in a secure cryptocurrency wallet is the closest thing to a traditional savings account on the market.
It is suited with a wide range of ERC-20 compatible wallets, several cryptocurrency exchanges, and real-world applications in cross-border money transfers and trade. It might also be beneficial as a crypto portfolio investment.
The USDC is backed by some of the most well-known names in crypto. Coinbase is one of the most favored cryptocurrency exchanges. Circle is not only funded by crypto-focused investors such as Bitmain and Blockchain Capital, but it also owned Poloniex between 2018 and 2019, a cryptocurrency exchange. In 2021, Circle announced its ambition to become a nationwide digital currency bank.
What’s So Special About USDC?
USD Coin’s distinguishing feature is that it has a value of $1 all the time. That’s a significant distinction from highly volatile cryptocurrencies like Bitcoin, Ethereum, and Dogecoin, which may see massive price fluctuations in a single day.
Other stablecoins based on the dollar include Tether (USDT), Binance USD (BUSD), and Dai. Binance USD is a stablecoin that is supported by Binance, one of the world’s largest cryptocurrency exchanges. Over the past year, Tether has generated considerable debate over its reserve stability. Dai works on the Maker platform and serves as a major alternative to existing players in the crypto space.
How Does USDC Coin Work?
The value of the USDC coins is derived from their underlying U.S. dollars. According to Circle, each USDC coin is backed by one single U.S. dollar. The conversion of U.S. cash into USDC tokens is known as tokenization.
The conversion of USD to USDC is a three-stage process that involves the following:
- The user transfers cash to the token issuer’s bank account.
- The issuer generates an identical amount of USDC using a USDC smart contract.
- The user receives a fresh batch of USDC, but the outdated dollars are kept in reserve.
It’s just as simple to swap USDC for USD as it is to create the token, and the process is exactly the same:
- A user contacts the USDC issuer and requests that a similar amount of USD be converted to USDC tokens.
- The USDC smart contract exchanges the tokens for USD and removes an equal amount of coins from circulation, as requested by the issuer.
- The issuer replenishes the necessary amount of USD from its reserves. The user is given the difference between the total and all costs in USDC tokens.
Unlike the most widely used stablecoin, Tether (USDT), the USD Coin’s creators are obligated to keep complete reserves of real money and work with a variety of financial firms.
USDC Pros and Cons
- Among the top two convertible stablecoins (along with Tether)
- The NY State Department of Financial Services and the Financial Crimes Enforcement Network regulate this firm.
- Enjoys institutional backing of Circle
- A team of experienced developers
- Ideal for worldwide USD-denominated transactions
- In the field of stable coins, there is a lot of competition.
- Requires the KYC process for purchases and redemptions.
- You won’t be able to add a lot of value to your investment.
How and Where to Buy USDC?
Open an Online Account
The easiest way to get USDC is through Coinbase. If you already have an account at Coinbase, you may easily convert other cryptocurrencies into USDC. Look for USD and select the buy option after that. You can send the tokens to any Ethereum wallet once the funds have been credited to your account.
If you do not already have an account with Coinbase, creating one is simple. Simply input your email address and create a password, and you’ll be good to go. You’ll need to submit personal identification information to Coinbase before trading cryptocurrencies under the Securities and Exchange Commission’s Know Your Customer (KYC) standards.
You can use Ether coins to purchase USDC on a decentralized exchange if you already own crypto. You’ll need a compatible Ethereum wallet, which is the best metamask – it has an easy-to-use Google Chrome extension. Uniswap will trade your Ether tokens for USDC after they’re sent to MetaMask.
Buy a Wallet (optional)
It’s not a good idea to keep your cryptocurrency, including USDC, on an exchange. Because centralized exchanges have access to all investors’ money, they are large targets for hackers. Countless exchanges have been hacked in the past, leaving customers without their bitcoins. Instead of keeping your crypto on an exchange, you should utilize a dedicated cryptocurrency wallet to store it.
Cryptocurrency wallets create a set of public and private keys that encrypt your digital money, making it completely yours. This is done by software wallets through a computer program, whereas hardware wallets are physical devices that store cryptocurrency offline.
Make your Purchase
To make purchases, you’ll need to fund your account. It’s simple to link your bank account with Coinbase and either ACH transfer or debit card to fill your account. Because USDC is almost always equivalent to $1, there’s no point in timing the market to acquire your USD Coins.
Coinbase, given how the exchange was associated with the creation of this stablecoin, is one of the most enthusiastic markets for USDC. USD Coins can also be purchased and exchanged on Poloniex, Binance, OKEx, and Bitfinex and decentralized exchanges such as Uniswap.
The price of USDC is $1.00, placing it ninth out of the top 100 cryptocurrencies on Coinmarketcap and having recently jumped 0.03 percent.
Unlike other major cryptocurrencies, it is not possible to directly purchase USDDC with fiat currency. However, this coin may be readily purchased by first purchasing Bitcoin on any fiat-to-crypto exchanges and then shifting it to the exchange that trades this cryptocurrency.
TrustToken aims to provide a means for companies and individuals to invest in and trade tokenized assets. These are cryptocurrencies that are also known as “stablecoins” because their price is more stable than most others due to being linked to real-world assets.
The third-party escrow accounts are critical to the proper functioning of TrustTokens tokenized assets. Anyone can purchase TrueUSD now that they have completed the Know Your Customer and Anti-Money Laundering checks.
In the case of TrueUSD, a buyer purchases USD in escrow and then creates a matching amount of TrueUSD. When other tokens are accessible, the consumer may pick which one they want to purchase.
The TrustToken team is looking to expand the TrueUSD’s pairings with other currencies in the future. The current minimum purchase requirement is $10,000, but it is anticipated that this amount will be lowered in the future.
Binance Chain’s native currency is Binance Coin (BNB), which is the company’s base cryptocurrency or digital currency. Traders and investors on the Binance platform may pay fees and trade using BNB since this coin was originally launched on the ERC-20 standard for Ethereum. This coin was formerly known as the Ethereum network’s native currency.
The Binance platform is responsible for more than 1.4 million transactions every second, according to the most recent stats released in April 2021. Furthermore, from the beginning of April through the middle of May 2021, BNB performed superbly and increased in value dramatically.
In a nutshell, BNB has a number of features grouped together into various categories. It’s the native coin of the Binance exchange and can also be used as an exchange token. This cryptocurrency offers several applications for users to choose from, and it’s up to them how they wish to utilize their Binance Coins.
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- Where To Buy Tether
Tether (USDT) is a cryptocurrency created by Tether Limited, a company controlled by the owners of Bitfinex. Tether was originally known as “Realcoin” because it was intended to be constant at $1. To make things easier to understand, Tether is a virtual dollar that exists in digital form.
While the idea is wonderful in theory, there are concerns and disputes surrounding it.
Tether Limited is a firm that controls Tether tokens’ reserves and allows for fiat deposits and withdrawals. It also creates and destroys the coins to keep the value stable.
Tether has emerged as an important component of the cryptocurrency market. Nowadays, there are more USDT and other stablecoins than U.S. dollars to be found in crypto trading pairs.
The introduction of the USDC coin is a breath of fresh air for cryptocurrency investors. This new generation of stablecoins aims to alter the market, which has been plagued by regulatory uncertainty and volatility in recent years.
Understandably, traditional investors are cautious about cryptocurrencies because they don’t know what will happen next with regard to regulations or if their investment might be worth nothing tomorrow. However, with this type of stability behind it, maybe now would be a good time to invest?