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What is USD Coin (USDC)?

What is USD Coin (USDC)?

This article looks at how USDC works and its advantages over competitors like Tether (USDT).

USD Coin (USDC) Introduction

USD Coin (USDC) is a USD stablecoin issued by CENTRE, a consortium created by Coinbase exchange and a fintech company called Circle. Its value is pegged to the US dollar by fiat currencies and commodities at a 1:1 ratio, which means that 1 USDC is equal to 1 USD.

USDC was first launched as an ERC-20 token in 2018 and has since expanded to other major platforms. While there are many USD stablecoins in the market, USDC stands out amongst the crowd because it is created by a regulated entity that is registered with the US government as a Money Service Business. Besides being regulated, reserves backing USDC are audited by Grant Thornton on a monthly basis, ensuring the value and liquidity of the cryptocurrency.

How USD Coin (USDC) Works

USDC is a fiat and commodity collateralized stablecoin, which means that for every USDC token issued, there is a dollar or a dollar value in dollar-denominated assets. To maintain the balance between the reserve and the amount of USDC, new USDC is minted every time you use fiat to buy USDC, and the fiat is deposited into the reserve; likewise, when you sell USDC to get fiat, the fiat is transferred from the reserves to your bank account, and the sold USDC is burned.

According to the data by the parent company Circle, there are 48.7 billion USDC in circulation as of September 2022. USD 48.8 billion is kept in USDC reserves, of which 10.2 billion is in cash and the remaining 38.6 billion in short-duration US treasuries.

Use cases

With its aim of being an open-source, smart contract-based stablecoin, USDC today has become increasingly popular as a currency for trading, investing, and international payments across the CeFi and DeFi ecosystems.

Protection against volatility: USDC is widely used to "protect" one's assets against the high volatility of the cryptocurrency markets. Typically, investors will store a portion of their USD Coin funds on exchanges to stabilize the price while waiting to trade them for other crypto-currencies.

Money transfer: Unlike the US dollar, it does not require verification by a centralized entity such as a bank, and there are no limitations on the amount of money.

The USDC, therefore, gets rid of the cost, time, and authorization limitations that still surround fiat currency transfers.

How to buy USDC on Bitget?

The easiest and most convenient way to buy USDC is to purchase it via an exchange that offers various payment options like Bitget. You can use Google Pay, Apple Pay, or different credit cards.

Step 1 - Go to Bitget and sign in (or create a new account if you have not already and claim a new user reward).

Step 2 - You can buy USDC via P2P trading or with fiat on Bitget, or click here to buy USDC with your USDT.

Step 3 - To check the USDC you own, go to "Assets" and choose "Spot Account."

Disclaimer: All products and projects listed in this article are not endorsements and are provided for informational purposes only.

Simply create an account, and start exploring the incredible Bitget-Verse today!