On October 23, San Francisco-based crypto exchange Coinbase announced the launch of its new stablecoin, USD Coin (USDC). The exchange stated that customers residing in supported jurisdictions can now sell, buy and receive the USDC stablecoin at coinbase.com, Coinbase iOS and Android apps. USDC which is backed by physical dollars stored in company-controlled bank accounts can be sent and received by Coinbase customers across the world. Customers in the U.S. excluding those in New York can sell and buy the USDC token on coinbase.com.
The USDC token was initially launched by crypto exchange Circle. Presently, the token is not listed on Coinbase Pro, though the exchange stated that it will be added to the platform in the coming weeks. The Coinbase exchange said that it decided to support the USDC stablecoin as fiat-based blockchain currencies could contribute towards the development of a more open financial system. It could also further the adoption of decentralized applications (dApps).
Crypto exchange Coinbase stated that stablecoins like USDC are ideal for e-commerce applications and for business purposes. That is primarily because the payments denominated in these tokens can be made at any time of the day without the inherent risks of price volatility associated with using other cryptocurrencies and Bitcoin as working capital.
Stablecoins are at present used primarily as a USD proxy in cryptocurrency trading. Fiat-pegged assets collectively see more than $2 billion in trading volume. The vast majority of these trades are presently denominated in the controversial tether token, USDT, as stated in the CCN report.
Coinbase stated in its blog that each USDC token is 100 percent collateralized by a corresponding USD held in accounts subject to regular public reporting of reserves. The technology that was used to create the USDC token was collaboratively developed by Circle and Coinbase, in its capacity as co-founders and partners of the new CENTRE Consortium.
Crypto exchange Coinbase added that the advantage of a blockchain-based digital dollar like USDC is that it is relatively easier to program with, to use in dApps, to send quickly and to store locally compared to traditional bank account-based dollars. Thus, it considers the launch of USDC token as a significant step towards a more open financial system, as stated in the exchange’s official blog.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]