USD Coin is also unique because it is backed by a mix of cash and short-term U.S. Treasury securities, rather than just cash. This provides more diversification and liquidity for the reserve assets, as well as higher returns for the USDC holders. The mix of reserve assets is determined by Centre’s governance process, which involves input from various stakeholders, such as issuers, users, regulators and auditors.
USD Coin is also unique because it is governed by Centre, a consortium that aims to create a global network of fiat-backed stablecoins that can interoperate with each other. Centre’s vision is to enable universal access to digital money that is fast, secure and transparent. Centre also sets the technical, operational and regulatory standards for issuing and redeeming USDC.
What are the key features of USD Coin?
Some of the key features of USD Coin are:
- 1:1 peg to the U.S. dollar: The value of one USDC coin is always equal to one U.S. dollar, regardless of market conditions or supply and demand. Users can always redeem their USDC for U.S. dollars at a 1:1 ratio through Centre’s authorized issuers.
- Multi-chain compatibility: USDC can be used on various blockchains that support the ERC-20 standard or other compatible standards. This allows users to benefit from the different features and advantages of each blockchain, such as scalability, security and innovation.
- Open-source and transparent: USDC is an open-source project, meaning that anyone can view and contribute to the project’s code. USDC is also transparent, meaning that anyone can verify the amount of USDC in circulation and the amount of reserve assets backing it through Centre’s website and monthly attestation reports.
- Decentralized and censorship-resistant: USDC transactions are recorded on public blockchains that are maintained by a network of nodes that operate independently from each other. This ensures that no single entity can control or manipulate the USDC network or censor its users.
USD Coin History
How did USD Coin come about?
USD Coin was launched in September 2018 by Coinbase and Circle as part of the Centre consortium. The idea behind USD Coin was to create a stablecoin that could provide a bridge between the traditional financial system and the emerging digital economy. By tokenizing the U.S. dollar on the blockchain, USD Coin could enable fast, secure and low-cost global payments that are accessible to anyone with an internet connection.
