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What is USDC? Beginner’s Guide (2021)

US Dollar Coin (USDC) is a stablecoin—a cryptocurrency token pegged to the value of a real-world asset, in this case the US Dollar.

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In brief

  • US Dollar Coin (USDC) is a stablecoin, a type of token that is backed by real-world assets.
  • It was created in a joint venture by fintech company Circle, and crypto exchange Coinbase.
  • Initially an ERC-20 token, it has expanded beyond Ethereum to other blockchains.

After the wild ride of Bitcoin, some investors want more stable cryptocurrencies. Enter ‘stablecoins’—tokens that are backed by real-world assets. The US Dollar Coin (USDC) is one of a flurry of such stablecoins that are worth the same as the US Dollar.

Can it help ease crypto anxiety? We find out below.

What is US Dollar Coin?

The US Dollar Coin is a stablecoin that claims to have a 1:1 value with the actual US Dollar. Essentially, that means one US Dollar Coin (USDC) should equal one real US Dollar, giving some much-needed stability in the market. Originally an ERC-20 token, it has since expanded to the Algorand and Solana blockchains.

Did you know?

Circle is behind CENTRE, a consortium that creates frameworks and standards to improve mainstream adoption of stablecoins.

Who created US Dollar Coin?

The US Dollar Coin was created in a joint move by Coinbase, the hugely popular cryptocurrency exchange, and Circle, a crypto finance company based in Boston. Circle is backed by several high-profile companies, including Goldman Sachs.

Circle started in 2013 as way to send money easily and quickly. Since then, it has expanded into cryptocurrency—raising millions in venture capital and acquiring crypto exchange Poloniex.

USDC: a brief history

  • May 2018 – Circle announces US Dollar Coin, funded by $110 million in venture capital funding
  • September 2018 – US Dollar Coin officially launches
  • December 2018 – The token is ranked #5 by total market cap, according to CoinMarketCap
  • January 2019 – Centre publishes Grant Thornton statement attesting to $251 million held by Circle for USDC.
  • May 2019 – USDC open for trading in 85 countries.
  • March 2020 – DAI stablecoin accepts USDC as collateral. More than $10 million USDC minted per day amid the early days of the coronavirus pandemic.
  • June 2020 – Usage takes off amid the decentralized finance (DeFi) boom.
  • September 2020 – USDC partners with Algorand.
  • October 2020 – By October, the market cap of USDC increases to $2.6 billion. USDC partners with Stellar and Solana.
  • November 2020Bitcoin’s bull run starts, bringing another rush of money to USDC.
  • January 2021 – By January, $4.7 billion USDC is in circulation.

What’s so special about USDC?

The US Dollar Coin isn’t the first or even the most popular US Dollar-backed coin. That title belongs to Tether. But Tether is under intense scrutiny over the state of its finances. It once claimed to have a real dollar in the bank for every Tether in circulation, but an investigation by the New York Attorney General caused it to step back from that claim. The investigation is still ongoing.

That has led to a rise in other US Dollar-backed stablecoins that have more transparent funding and auditing processes. These include Gemini dollar, True USD, Paxos, and US Dollar Coin (USDC).

While USDC may not be totally unique compared to those competitors, here’s why it stands out from other cryptocurrencies:

  • 🏛 Regulated: USDC’s parent company is a registered Money Service Business in the United States. That means it’s regulated by the government’s Financial Crimes Enforcement Network (FinCEN), which combats money laundering.
  • ⚖️ Audited: USDC is audited by Grant Thornton, one of the top 10 accounting firms in the world.
  • ⚡️ Fast: It can take a long time to send US Dollars to people and institutions when banks are involved. USDC offers the stability and desirability of the US Dollar with the speed of cryptocurrency transactions.

How is the US Dollar Coin produced?

The US Dollar Coin isn’t mined like a lot of other cryptocurrencies. It is available as Ethereum ERC-20, Algorand ASA, and Solana SPL tokens that can be purchased using US Dollars on several major exchanges. Circle says there is a total supply of four billion tokens in circulation right now.

How does the US Dollar Coin work?

After a customer meets the Know Your Customer (KYC) identity requirements, they can link their bank account and make a wire transfer in US Dollars. That money is then converted into USDC, and the customer can use an exchange to trade it for other cryptocurrencies.

The customer can also convert the USDC back into US Dollars, which will then be wired back into their bank account.

What can you do with the US Dollar Coin?

The US Dollar Coin can be traded on Poloniex and Coinbase (the exchanges of USDC’s parent companies), and on other major exchanges like Binance and Huobi.

You can also use USDC in a variety of decentralized finance protocols. You can, for instance, deposit it in BlockFi, a loans company that offers you interest for depositing USDC (among other coins).

USDC is usually held as a stable asset by crypto traders, just like other stablecoins such as Tether and DAI. Stablecoins are useful for traders who want to have an easy way to trade cryptocurrencies for US dollars. Since USDC represents a US dollar, it’s a neat way to trade more volatile currencies, such as Bitcoin.

Recent developments

In 2020, USDC expanded to other blockchains. Ethereum, its native blockchain, is often slow and beleaguered by bottlenecks. So Centre has forged partnerships with Algorand, Stellar and Solana, rival blockchains, to expand the market.

On those blockchains, USDC does much the same. Smart contracts on Algorand might require USDC to power them, for instance.

In November 2020, Circle announced that it’s working with the US government to divert aid to Venezuelan healthcare workers through the country’s exiled government is in exile. The US Treasury and the Fed gives money to its acting president, Juan Guaidó. Guaidó’s government then uses that money to mint USDC, which it then sends to Airtm, a crypto exchange. Airtm then sends those funds to Venezuelan healthcare workers in the form of its own US dollar stablecoin, AirUSD.

Governments have sought to regulate stablecoins, particularly as central banks work on their own digital currencies. Privately-issued stablecoins have irked regulators. An October 2020 report from the G7 nations highlighted regulatory and oversight challenges around stablecoins, including market integrity, data privacy and terrorist financing. They also undermine the sovereignty of central banks, argued the G7, since they rival its ability to influence the monetary supply.

However, in January 2021, the US Office of the Comptroller of the Currency (OCC) issued guidance stating that banks may use blockchains and stablecoins to facilitate payments. Unsurprisingly, Jeremy Allaire, co-founder and CEO of Circle, was elated, tweeting that it was “a huge win for crypto and stablecoins.”

The future

Traditional investors are wary of cryptocurrency for two key reasons: lack of regulation and volatility. This new wave of stablecoins seeks to change all of that, becoming a gateway for well-established institutions to dive in.

USDC’s parent company isn’t shy about saying the currency is for those who want to move medium to large amounts. By becoming a more attractive way for institutional investors to get involved, stablecoins like USDC could help make cryptocurrencies more mainstream.

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Cardano (ADA) Death Cross Spells Worries Despite Bullish “Mary” Fork

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  • Cardano (ADA/USD) bounces off a critical support trendline during the Asia-Pacific trading session Friday.
  • The blockchain asset expects to close above key moving average waves on the prospect of turning into a multi-asset chain following its hard fork on March 1.
  • Nonetheless, a death cross formation offsets the probability of more price legs higher.
  • Levels to watch

A sell-off in the Cardano market Thursday brought its benchmark instrument ADA/USD down by more than 11 percent.

The pair touched a week-to-date low of $1.02, about 31 percent lower than its record high established on February 27. It later underwent a modest recovery phase after finding support in a short-term upward trendline. The bounce prompted the price to attempt a close above its 50-period moving average, only to pull back later owing to higher selling pressure near the blue wave.

Cardano, ADABTC, ADAUSD, ADA, cryptocurrency
Cardano slips after testing its 50-period simple moving average wave as resistance. Source: ADAUSD on TradingView.com

It appears likely for Cardano’s ADA to retest the ascending trendline support, further pressured by a death cross formed after the 20-period moving average slipped below the 50-period moving average. It signals additional selling pressure in the market in the short-term.

Should the sell-off continue, ADA/USD risks plunging towards its 200-period moving average. It is right now around $0.88. Meanwhile, an extended slipover below the orange wave would have traders view $0.80 as their downside target. The level has served as support all across February.

Bullish Fundamentals for Cardano

The downside correction in the Cardano market follows its 700 percent-plus price rally in 2021. ADA/USD rallied partially because of an overall upbeat sentiment in the cryptocurrency market, led by Tesla’s $1.5 billion investment into Bitcoin. Altcoins tend to tail the benchmark cryptocurrency’s price trends.

Second, the ADA price surged amid a broader rally among projects that rival Ethereum, the second-largest cryptocurrency by market cap and the leading blockchain network with smart contract functionalities. The transaction and gas fees on the Ethereum network surged aggressively during the February session, prompting speculators to make bets on its rivals.

Cardano briefly surged to the third rank in the top cryptocurrencies’ list, only to get replaced by Binance

#Cardano still holds the level for support here.

Has to break and flip the 2400 sats area for continuation either way.

Otherwise, I’m looking at 1900-2100 next. pic.twitter.com/i9SoHN4YiW

— Michaël van de Poppe (@CryptoMichNL) March 5, 2021

Nonetheless, the reason why traders raised their bids in the ADA/USD market was “Mary” — a hard fork that made Cardano a multi-asset chain network upon its successful deployment on March 1. Cardano’s upgrade will enable new tokens on its network and offer smart contract services just like its rival Ethereum.

“Slowly but surely, the momentum is fading away from Cardano after the Mary hardfork,” noted Michaël van de Poppe, an independent market analyst. “That’s normal. Natural market movements. Hype pre-event, calm, and getting back to equilibrium after the event. That’s how it always goes. ADA will continue running later.”

ADA was trading for $1.13 at the press time.

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Source: https://www.newsbtc.com/news/cardano/cardano-ada-death-cross-spells-worries-despite-bullish-mary-fork/

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FCA Issues Timeline to Cease LIBOR Benchmark

Most of the currency settings will end by the end of 2021.

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The Financial Conduct Authority (FCA) is officially ending the controversial LIBOR benchmark for most of the currencies, a decision that came after an industry consultation in December led by the ICE Benchmark Administration.

The FCA, which oversees the global benchmark, announced on Friday that the publication of LIBOR will be ceased after December 31, 2021, for the pound sterling, euro, Swiss franc, and Japanese yen and also for the one-week and two-month US dollar settings.

The rest of the US dollar settings will cease on 30 June 2023. According to the regulator, these timelines will ensure a smooth transition of the cessation of the benchmark.

“Today’s announcements provide certainty on when the LIBOR panels will end,” FCA CEO Nikhil Rathi said in a statement. “Publication of most of the LIBOR benchmarks will cease at the same time as the panels end. Market participants must now complete their transition plans.”

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The Scandalous FX Benchmark 

The reputation of LIBOR, which measures the cost of unsecured borrowing between banks, was tainted by the manipulation of its rates done by several banks. Many traders were charged and penalized for their role in this mass forex market rigging.

Though global authorities were pushing banks, asset managers, and other market participants to stop using the FX benchmark, the recent regulatory decision finally cleared the conundrum over the benchmark of a nearly dead market.

“Today’s announcements mark the final chapter in the process that began in 2017, to remove reliance on unsustainable LIBOR rates and build a more robust foundation for the financial system. With limited time remaining, my message to firms is clear – act now and complete your transition by the end of 2021,” said Andrew Bailey, Bank of England governor.

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Source: https://www.financemagnates.com/institutional-forex/fca-issues-timeline-to-cease-libor-benchmark/

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Leading on-Chain Option Trading Protocol Oddz Finance Announces Its Public Distribution IDO on Polkastarter

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Oddz Protocol is a trustless On-Chain Option trading platform that expedites the execution of call and put options contracts, conditional trades, and futures. It allows the creation, maintenance, execution, and settlement of trustless option contracts, conditional tokens agreements, and futures contracts in a fast, secure, and flexible manner.

It employs the synergies of Ethereum, Binance Smart Chain, and Polkadot to unleash the potential decentralized derivatives market. It focuses on building solutions that can propel the DeFi ecosystem by simplifying derivatives trading and enhancing the user experience.

Oddz Finance associates with a decentralized fundraising platform, Polkastarter to drive the DeFi revolution.

Incepted with the idea of creating a seamless derivative options trading experience for users, Oddz is all geared up to redefine how derivatives markets work in a decentralized financial landscape. With the high degree of intuitiveness and fascinating attributes, Oddz Finance is all set to spearhead chartered territories by consolidating the models of traditional finance with DeFi to capture the broader spectrum of the DeFi market.

To transform the idea into reality, Oddz finance has announced its public distribution IDO to allow the community’s participation to contribute to the vision of mainstream DeFi adoption. Therefore, it has joined forces with the leading cross-chain auction protocol, Polkastarter. The public IDO will occur on 18th March on the leading platform, thus inching one step closer to massive adoption.

Users will be able to participate in the IDO process by undergoing the whitelisting process in various phases to gauge the efforts of early supporters. The Whitelisting process for Phase 1 for Polkastarter IDO will commence on 5th March at 12 PM UTC and closes on 10th March at 12 PM UTC. The second whitelisting phase will commence from 13th March at 12 PM UTC to 14th March at 12 PM UTC. $150,000 worth of $ODDZ tokens will be allocated on the Polkastarter platform for the $POLS and Non-$POLS holders.

The Whitelisting phases will employ a random lottery method to promote fair participation. To dive deeper into the nuances of the IDO and partnership, Oddz Finance has provided a comprehensive overview of the entire process. In the quest of creating an immersive user experience and making options trading seamless, Oddz Finance is relentlessly working towards unleashing the true potential of the DeFi landscape by employing technological innovation at its best.

The public distribution IDO is a major milestone for Oddz Finance in this expedition to evoke a revolution by powering ODDZ for novice users by providing a seamless gateway opening the doors of decentralized finance. It aims to breakthrough technical complexities to allow users to experience the nuances of options trading and create awareness about the same. In the upcoming days, it is all set to release its testnet and product development demos that would contribute to the overall growth of Oddz finance.

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Source: https://www.newsbtc.com/news/company/leading-on-chain-option-trading-protocol-oddz-finance-announces-its-public-distribution-ido-on-polkastarter/

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