USD Coin, known as USDC, is a US dollar-backed stablecoin created by Circle and Coinbase (the Centre Consortium) in 2018. It quickly became appealing as it is the only fully and publicly audited stablecoin currently available. Built on Ethereum, USDC is backed by industry giants such as Goldman Sachs and Silvergate. Unlike other stablecoins, USDC is verifiably fully collateralized. This means that for every USDC released, there is a US dollar deposited into a Centre Consortium bank account, which is heavily monitored and audited every month by Grant Thornton LLP as part of their emphasis on transparency.
We believe there are many benefits to holding USDC, including low-fee, fast international transfers without the volatility inherent in other cryptocurrencies. USDC serves as a bridge between fiat and crypto, with the security and stability of one and the globalization of the other.
Stablecoins have around 40% of their relative daily value traded each day when compared to bitcoin and ethereum as of March 31, according to Coinbase reports. As their popularity continues to increase, we expect this daily value trading number to increase. Currently, USDC’s total supply is at 737 million.
There are many stablecoins, with different collateralization methodologies (read our sector update here for an in-depth look at the market). The EQUOS team chose USDC as our first stablecoin because our values around transparency and accountability align seamlessly. For us, it was important to have a stablecoin fully backed by fiat with widespread accessibility. USDC is readily available on many centralized and decentralized exchanges all over the world. On EQUOS, we give traders the option to decide whether they prefer to hold their funds in US dollar or USDC interchangeably, according to their individual preferences. Circle recently announced its intention to expand USDC use cases with new API’s and revisited blockchain solutions in the hopes of creating a “new form of money flow”.
As the finance industry continues to evolve, we believe USDC will continue to grow in popularity due to its accountability. Both retail and institutional investors in emerging economies with volatile local currencies or limited access to traditional banking services are turning to stablecoins as a safe store and transfer of value. Going forward, we expect this demand to increase and USDC to play a critical role as a well-managed auditable asset that investors can use to bridge the gap between the fiat and digital asset space.