What is USD Coin (USDC), fiat-backed stablecoin? — adidaswilson

Author Adidas Wilson
3 min readFeb 28, 2023

USD Coin (USDC) is a fiat-backed stablecoin that was launched in 2018 by the Centre Consortium, a joint venture between Circle and Coinbase. The USDC is a digital asset that aims to provide users with the stability of the US dollar while taking advantage of the speed, transparency, and security of blockchain technology.

A stablecoin is a type of cryptocurrency that is pegged to the value of an underlying asset, usually a fiat currency like the US dollar, euro, or yen. The main advantage of stablecoins is that they offer the stability of fiat currencies without the volatility of other cryptocurrencies like Bitcoin or Ethereum.

USDC is a stablecoin that is backed 1:1 with US dollars. For every USDC token in circulation, there is an equivalent amount of US dollars held in reserve. This means that USDC holders can redeem their tokens for US dollars at any time, which ensures that the value of USDC remains stable.

USDC operates on the Ethereum blockchain, which means that it benefits from the security and transparency of the Ethereum network. It is an ERC-20 token, which is a standard for tokens on the Ethereum network.

USDC can be used for a variety of purposes, including:

Payments: USDC can be used to make payments to anyone, anywhere in the world, instantly and at low cost. This makes it a convenient and efficient way to transfer money.

Trading: USDC is listed on numerous cryptocurrency exchanges, which means that it can be traded for other cryptocurrencies or fiat currencies.

Remittances: USDC can be used to send money across borders quickly and at low cost. This makes it a useful tool for people who need to send money to friends or family members in other countries.

DeFi: USDC is a popular choice for decentralized finance (DeFi) applications, which are built on top of the Ethereum blockchain. DeFi applications enable users to access financial services without the need for intermediaries like banks.

USDC is issued by regulated financial institutions that are audited regularly to ensure that they hold enough US dollars in reserve to back the tokens in circulation. This ensures that USDC remains fully collateralized…

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Author Adidas Wilson

Adidas Wilson was born in Chicago, surviving a near death experience driving off a bridge in an 18 wheeler and getting hit by a train. Author and Motivator