What is the USDC cryptocurrency and how is it different from the USDT stablecoin?

USDC - what is it? The history of the emergence of cryptocurrency

USD Coin (USDC) is a stablecoin, that is pegged to the US dollar and is stable. It was created with the aim of ensuring the stability of cryptocurrency transactions, reducing volatility and improving the usability of daily transactions. Each USDC is backed by a 1:1 US dollar reserve, allowing it to be exchanged for physical dollars at any point in time. USDC is issued on the basis of the Ethereum blockchain and can be used to send payments, trade on cryptocurrency exchanges, and as a protection against the volatility of the cryptocurrency exchange rate.

The USDC cryptocurrency was created by CENTER, an organization founded by the Coinbase crypto exchange and Circle, whose main specifics are financial technologies (FinTech). Each USDC is redeemed for 1 USD, and is also backed by 1 dollar or an asset denominated in dollars with an equivalent value that is held in accounts with US regulated financial institutions. These accounts are subject to ongoing review by Grant Thornton LLP, who publish confirmations of USDC backing reserves each month.

What makes the USD coin unique?

In terms of functionality, USD stablecoins essentially offer the same thing. They aim to maintain a value of $1 and work like any other digital currency, so they can be transferred between cryptocurrency wallet addresses.

The most important factors for a stablecoin are transparency and reliability, areas where USD Coin performs better than most of its competitors.

Centre, the consortium that manages USD Coin, publishes monthly reports issued by Grant Thornton, LLP, one of the leading accounting firms in the country. His reports show the amount of USDC in circulation and the total value of reserves backing the USD Coin. This is important because it shows that there are real funds in the account for each USDC.

Another advantage of USD Coin is the type of funds that support it. While some issuers back their stablecoins with various financial instruments, USD Coin reserves consist only of US Treasury securities and cash deposits.

Features USDC

• USDC is audited monthly by one of the world's leading accounting firms.Since its inception, USDC Circle has published monthly audit reports through Grant Thornton, one of the world's leading accounting firms. Audits prove that users can access a volume of fiat-backed reserves equivalent to the total turnover of USDC.
• USDC is regulated by the US Financial Crime Enforcement Network.As a provider of financial products and services, Circle is a legally recognized business in the United States. As a result, it is regulated by the Financial Crime Enforcement Network (FinCEN), which aims to combat financial fraud.
• Sending dollars with USDC is faster and easier than with a bank.The key advantage of USDC is that it allows the exchange of cryptocurrencies without requiring users to transfer fiat currency to and from crypto exchanges. Sending USDC is faster than sending fiat currency as payments are instantaneous and can be done around the clock. In fact, its minimal transaction fees make it cost-effective.
• It's not decentralized. Unlike cryptocurrencies like bitcoin and ether, USDC is issued by a centralized entity that must be under the government. If the government decides that action needs to be taken against a USDC holder, all of their cryptocurrencies will be frozen. This has led to a recent drama with a potential asset freeze that interacts with the Tornado Cash crypto mixer.

How does USDC work?

USD Coin is built on an open source fiat stablecoin platform developed by Centre. New tokens USDC is minted when people buy it and withdrawn from circulation when people sell their tokens for US dollars.

Let's say you want to buy USD Coin through a crypto exchange. Here's how the three-step tokenization process works:

• The process of sending US dollars to a crypto exchange to buy USDC.
• The exchange uses the USDC smart contract to mint as much USDC as needed.
• You receive a freshly minted US dollar coin and the exchange puts the US dollars you paid into the US dollar coin reserves.

The tokenization process ensures that there are reserves backing the entire supply of USD Coin.

In the event that you want to sell USDC, the same process is followed, only in the opposite order. The exchange uses a smart contract to remove the USDC tokens you sell from circulation and pay you the equivalent amount in USD from the reserve.

USD Coin vs. Tether

USD Coin and Tether are the largest stablecoins by market capitalization. If you are planning to buy a stablecoin in USD, you might be wondering which one to choose and if there is a difference between them.

Stablecoins have the same uses and typically hold a value of $1. However, each has advantages over the other, so they are not completely interchangeable.

USD Coin is considered a safer option due to its transparency. Its management has provided reports since its launch, checking its inventory. Tether Limited, on the other hand, has not provided information about its holdings for years. It also ran into legal troubles related to a lack of transparency, with a lawsuit alleging that Tether's unsecured issuances caused $1.4 trillion in damage to the cryptocurrency market.

Advantage of Tether in his size. It has a much larger market cap than USD Coin and a higher trading volume than any stablecoin. It will usually be a bit easier to exchange Tether for other cryptocurrencies due to the trading volume.

For investors, USDC also has the advantage of being subject to more regulatory oversight, as it is considered a stored-value instrument in most US states. Tether has also not yet been independently audited.

Partnerships

USD Coin has signed several major deals that could help it expand significantly as a payment method and cryptocurrency. In September 2022, Circle and Robinhood teamed up to make USD Coin the first stablecoin offered by the broker. Since the broker offers commission-free cryptocurrency trading, investors who want to get the best buy deal stablecoin, can flock to Robinhood, where they can buy USD coins without any additional fees.

Circle also has partnerships with two of the largest payment networks in the world and some of the most popular payment processors. At the end of 2020, Circle partnered with Visa, allowing businesses on the Visa network to accept U.S. dollar coins. In July 2021, Mastercard announced plans to use USD Coin as a payment method. Payment systems Stripe and Checkout.com announced support for USD Coin in 2022.

One of the reasons why USD Coin is so widely used is because it is supported by multiple blockchains and developers can exchange it between all of these blockchains. Here are the blockchains that are part of the USDC network:

• Algorand
• Avalanche
• Ethereum
• Flow 
• Ivy
• Solana 
• Stellar
• Tron 

How to buy USDC?

You should have no problem finding USD Coin. Due to its widespread use, it is sold by a number of crypto exchanges, stock brokers, and cryptocurrency exchanges. Here are a few main platforms where you can buy USD Coin:

• Coinbase
• Gemini
• Robinhood
• Kraken
• eToro

You can also exchange USDC on crypto exchanges. In Ukraine, the most popular is Coin24.com.ua. Select the currency for which you want to buy a token, you can see Here. 

USD Coin is useful for individuals and companies that need a digital dollar. It's easy to use whether you're sending, receiving or lending. Stablecoins are not guaranteed, but USD Coin's transparency makes it one of the safest options.

USDC rate forecast in the near future

When you study any of the forecasts of possible rates for the USD Coin coin, you need to remember that the crypto market is very unstable. Analysts and forecasters who use special algorithms in their work may be wrong in their forecasts. But, nevertheless, here are some of the forecasts of leading experts and companies:

• WalletInvestor believes that the USD Coin/USD exchange rate will remain largely pegged to the US dollar over the next five years. Following the coin exchange rate in US dollars for 2025, the average price of a coin will be from $1 to $1,007.
• DigitalCoinPrice predict that by 2030 the coin will be valued at $1.01.
• Gov Capital is optimistic and says USDC will hit $1.66 in one year and $5.59 in five years.

In the event that you are interested in trading crypto-currency tokens such as USD Coin (USDC), we advise you to do your own research first.

Conclusion

Traditional investors are wary of cryptocurrencies for two reasons: regulatory uncertainty and volatility. This new generation of stablecoins is set to make a difference by acting as a channel for established organizations to enter the market. The USDC parent business is not afraid to say that the currency is for people who want to transfer medium to large amounts of money. Stablecoins like USDC can help make cryptocurrencies popular by making them more attractive to institutional investors.