USD Coin (USDC) is one of the most popular stablecoin cryptocurrencies on the market today. Since USD Coin price is pegged to the value of the US Dollar, its value is incredibly stable.

While price stability is the biggest selling point for USD Coin, there are lots of other reasons why USD Coin has quickly become one of the most commonly used cryptocurrencies in the world. We’ll cover all those reasons and more in this guide.

USD Coin Price

As you can see from the chart above, USD Coin price has remained remarkably stable since the coin launched in 2018. At its onset, USD Coin was worth exactly $1. This makes sense because USD Coin is tied to the US Dollar. Since 2018, USD Coin has reached a peak price of $1.17 and an all-time low of $0.87. Compared to other popular crypto coins, this price fluctuation is practically nothing. 

What is USDC?

usdc coin

USD Coin is a stablecoin operated by Centre through a collaboration with Circle and Coinbase, two major crypto companies. Stablecoins are coins whose value is tied to some other currency. In the case of USD Coin, its value is based on the value of the US Dollar. Because the price of the US Dollar doesn’t fluctuate much, the USD Coin price is able to remain stable.

USD Coin’s price stability has made it a very popular option for crypto enthusiasts who don’t want to invest in riskier coins like Bitcoin (BTC) or even more speculative coins like Dogecoin (DOGE). USD Coin is one of the most popular stablecoins and is often used for transacting online.

For clarity’s sake, we refer to USD Coin as “USD Coin” in this guide, but it’s also often referred to by its acronym “USDC.” Don’t get USDC confused with USDT, which is another popular stablecoin pegged to the US Dollar. We’ll get more into the difference between USDC and USDT later on in this USD Coin guide.

In a nutshell, USD Coin is a service to tokenize US dollars and facilitate their use over the internet and public blockchains. Besides, USDC tokens can be changed back to USD at any time. The execution of issuing and redeeming USDC tokens is ensured with ERC-20 smart contract.

Bringing US dollars on the blockchain allows moving them anywhere in the world within minutes, and brings much-needed stability to cryptocurrencies. Also, it opens up new opportunities for trading, lending, risk-hedging and more.

Who is the Team Behind The USD Coin?

USD Coin is developed by the Centre consortium, a partnership between Circle and Coinbase. The technology and governing framework are developed by Centre, while Circle and Coinbase are the first commercial issuers of USDC. Circle was founded in 2013 by the entrepreneurs Jeremy Allaire and Sean Neville and has a pretty impressive line up of authoritative individuals on board. You can view the full team behind the USDC coin on the About Circle page.

Circle is an official Money Transmitter, which makes the company an open financial book. Money Transmitters are US money service businesses that must comply with federal laws and regulations. Before the issuance of USDC, the equivalent amount of USD is with one of Circle’s accredited partners. Consequently, all USDC tokens are regulated, transparent and verifiable. Besides, Circle is known as the crypto startup backed by Goldman Sachs.

Centre went live with USD Coin in 2018. Since then, it has steadily grown in usage and popularity in the US and around the world. Today, USD Coin is one of the most popular stablecoins and a very common name in crypto circles. 

How Does USD Coin Work?

USD Coin exists on the blockchain like other cryptocurrencies, but it’s much more managed than other decentralized currencies. In order to maintain the 1:1 value compared to the US Dollar, the amount of USD Coin available on the market is heavily regulated. 

When you sell USD Coin, your coin is “burned” and moved to an inaccessible account. When you buy USD Coin with fiat currency, your currency is deposited in a regulated bank account and new USD Coin is minted.

Tokenizing USD into USDC is a three-step process:

1) A user sends USD to the token issuer’s bank account.
2) The issuer uses USDC smart contract to create an equivalent amount of USDC.
3) The newly minted USDC are delivered to the user, while the substituted US dollars are held in reserve.

Redeeming USDC for USD is as easy as minting the token, except the process is reversed:

1) A user sends a request to the USDC issuer to redeem an equivalent amount of USD for USDC tokens.
2) The issuer sends a request to the USDC smart contract to exchange the tokens for USD and take an equivalent amount of tokens out of the circulation.
3) The issuer sends the requested amount of USD from its reserves back to the user’s bank account. The user receives the net amount equivalent to the one in USDC tokens, minus all incurred fees).

Unlike the most popular stablecoin Tether (USDT), creators of the USD Coin are obligated to provide full transparency and work with a range of financial institutions to maintain full reserves of the equivalent fiat currency.

All USDC issuers are required to regularly report their USD holdings, which are then published by Grant Thornton LLP. All the monthly attestation reports can be found here.

How to Use USDC

USD Coin (USDC) is a 1:1 representation of one US dollar on the Ethereum blockchain. It’s an ERC-20 token and can be used with every app which supports the standard.

To tokenize or redeem USDC with Circle, you need to register an account, verify your identity (KYC), and link a legitimate bank account. Circle USD platform allows users to perform four core actions:

  • Tokenize USD;
  • Redeem USDC;
  • Transfer USDC out to ERC20 compatible Ethereum addresses;
  • Deposit USDC from external Ethereum wallet addresses.

Circle USDC doesn’t charge users any fees for tokenizing and redeeming services, except there is a $50 commission for incorrect and rejected bank transfers. For Coinbase USDC operations, all the standard fees apply.

A minimum USDC redemption amount is 100 USDC. The tokens are processed on business days only, and the process can take up to 24 hours.

There’s no minimum tokenization amount, and the process can take up to 2 business days.

In general, stablecoins like USDC are used to:

  • Short cryptocurrencies without cashing out and make it easier to buy cryptocurrencies in the future;
  • Avoid traditional financial instruments and institutions;
  • Avoid hyperinflation (for people living in countries like Venezuela or Turkey);
  • Send money instantly, globally, securely and at low cost;
  • Purchase items in various crypto dApps, exchanges, and blockchain-based games.

USD Coin Market Performance

USD Coin is one of the most popular stable coins on the market. Compared to other stablecoins, only Tether (USDT) has a larger market cap than USD Coin. At the time of writing, USD Coin’s market cap is $7.45B. 

How to Buy and Store USD Coin

Buying USD Coin is a super easy process. If you’re familiar with crypto at all, this process will look familiar to you. If you’re not, don’t worry. See our comprehensive guide below to learn all you need to know about buying USDC. 

  1. Create an account with a cryptocurrency exchange platform. If the exchange has a crypto wallet service that you are comfortable using, skip Step 2 and go to Step 3. 
  2. Open a crypto wallet where you can keep your USD Coin and other crypto.
  3. Complete your cryptocurrency exchange platform’s identity verification checks. Once you verify your identity, you’ll be able to take advantage of all the exchange’s features. 
  4. Deposit fiat currency into your cryptocurrency exchange platform account. 
  5. Use your deposit to purchase USD Coin. 
  6. If you are using an external wallet, you’ll need to send your USD Coin from your exchange account to your wallet. 

Believe it or not, it’s really that easy. Selling USD Coin is easy too. If you choose to use your cryptocurrency exchange platform as a crypto wallet, you can easily convert your USD Coin to fiat currency with just a few clicks. 

The Future of USD Coin

Predicting the future of any cryptocurrency is notoriously difficult. This is not the case with USD Coin. Because USD Coin is directly tied to the value of the US Dollar, predicting the USD Coin price is very easy. USD Coin will always be worth approximately $1. 

So what is the future of USD Coin then? While USD Coin doesn’t have the potential to explode in value like other coins, our crypto experts predict USD Coin will explode in popularity. USD Coin allows consumers to use cryptocurrency like fiat currency, which makes it appealing to crypto fans looking for the security crypto provides without the volatility of other coins. It is very useful for certain transactions that need a stable currency. 

Risks and Challenges

Cryptocurrency is a largely unregulated environment. This makes investing in any coin a more risky venture than investing in traditional financial assets. However, because USD Coin is a stablecoin, it’s a safer purchase than other coins. 

The benefit of USD Coin being a stablecoin is also one of its downsides. Because there is no chance to have your investment “go to the moon” when you buy USD Coin, less crypto enthusiasts have bought USD Coin than other coins. Practically speaking, USD Coin being less popular than other coins means it’s less wide-accepted than other coins. This is not going to be an investment that makes you rich. 

Regulatory and Legal Aspects of USD Coin

Like most of the crypto industry, USD Coin is largely unregulated in the US. This means your investment could be at risk should the government decide to crack down on crypto. It also means that your investment isn’t protected by traditional banking laws. 

However, USD Coin is backed by US Dollars held in segregated accounts at regulated financial institutions in the US. This is an added level of protection not offered by most cryptocurrencies, but we’d still advise you to be careful considering the overall risk of fraud in the crypto industry. 

Community and Ecosystem

With respect to other crypto communities, the USD Coin community is one of the most level-headed in the world of crypto. People who buy USD Coin aren’t looking to make millions from their coin. They are buying USD Coin to spend it like they would fiat currency. Why not just use fiat currency then? Because using USD Coin enables for more secure transactions, smart contracts, and other perks provided by using cryptocurrency. 

Comparing USD Coin to Other Cryptocurrencies

Compared to some of the other big-name cryptocurrencies, USD Coin is relatively under the radar. This is reflected in USD Coin’s market cap compared to other top coins. 

Tether (USDT), the top stable coin on the market, has a $95B market cap. USDT is also based on the US Dollar, so it’s used in a similar way to USD Coin. Most experts agree that USD Coin is a more secure investment at this time though, so we wouldn’t be surprised to see the gap between USDT and USD Coin shrink in coming years. 

USD Coin has a market cap just over $7B at time of writing. Bitcoin, the undisputed king of cryptocurrencies, has a market cap of $834B. Binance Coin, another one of the smaller coins compared to Bitcoin and Tether, has a market cap of over $45B. 

Simply put, USDC is not a major player on the cryptocurrency market yet. However, it’s extremely popular among casual traders who value its stability, ease of use, and relative security compared to other popular coins.

How is The USDC Coin Different From Other Stablecoins?

Crypto stablecoins can be put into four categories:

  • Fiat-collateralized. These include all stablecoins pegged to reserved fiat value. All fiat-collateralized coins are centralized by design. Examples: Tether (USDT); TrueUSD (TUSD); Gemini Dollar (GUSD); Paxos Standard Token (PAX); Digix Gold (DGX); USD Coin (USDC).
  • Crypto-collateralized. These are stablecoins whose value is pegged to reserved crypto assets. Examples: Makercoin (MKR & DAI); Havven (nUSD & HAV).
  • Algorithmic non-collateralized. Software-based economic models that seek to provide price stability without any collateralized assets. Example projects: Basis; Kowala; Fragments.
  • Hybrid. Stablecoins which rely on a blend of the approaches listed above.Example projects: Carbon.

USD Coin falls into the first, fiat-collateralized coins category, and is a centralized stablecoin. In general, all the projects within the same category work in a similar fashion and have only minor differences. The more outstanding ones are Tether (USDT), known for refusing to conduct a genuinely transparent audit, and Digix Gold (DGX), whose value is pegged to gold.

The rest fiat-collateralized stablecoins release regular attestations and are backed by US dollars. The main differences between them revolve around their fee policies and different partner organizations, but the business model, for the most part, stays the same.

Where Can You Get USD Coin?

USD Coin (USDC) can be purchased in the following exchanges:

  • Binance (paired with BTC, BNB).
  • Poloniex (paired with BTC, ETH, XRP, BHC, STR, LTC, ZEC, XMR, DOGE).
  • Coinbase Pro (paired with BTC, ETH).
  • Coinbase (paired with
  • CoinEx (paired with USDT).
  • Coinsuper (paired with BTC, USD).
  • OKEx (paired with BTC, USDT).
  • CPDAX (paired with BTC).
  • Hotbit (paired with USDT).
  • Kucoin (paired with BTC, ETH, USDT).
  • Korbit (paired with KRW).
  • FCoin (paired with USDT).
  • LATOKEN (paired with BTC, ETH).
  • SouthXchange (paired with BSV, DASH).
  • COSS (paired with BTC, ETH).
  • Crex24 (paired with USD).

Besides these exchange pairs, USDC can be turned to USD and vice versa at Coinbase.

Where to Store USD Coin

USDC is an ERC-20 token issued on the Ethereum blockchain and can be stored in any Ethereum wallet. The most popular options are MyEtherWallet, MetaMask, Mint or Jaxx wallets. If you don’t know how to set up an Ethereum wallet, see this quick guide.

Current State of the Project

USD Coin is a rapidly developing project with credible institutions behind it. Since the project announcement in May 2018, its ecosystem has already expanded to more than 60 partners.

Some of the latest news surrounding the USDC project is about the level of control project creators retain over the stable cryptocurrency. Apparently, the developers hold the right to blacklist addresses and freeze funds if there’s any suspicion that the USD Coins are used for illegal activities.

However, most of the other stablecoins also have similar clauses. The only stablecoin without such terms is DAI by Maker.

Similar Projects

  • Tether (USDT). The oldest and most popular USD-backed stablecoin.
  • TrueUSD (TUSD). USD-backed ERC-20 token by TrustToken Platform.
  • Gemini Dollar (GUSD). USD-pegged ERC-20 token issued by Gemini exchange.
  • Paxos Standard Token (PAX). An ERC-20 token pegged to the US dollar.
  • Dai (DAI). ERC-20 stablecoin pegged to the USD.
  • bitCNY (BITCNY). A stablecoin issued on BitShares blockchain and backed by Chinese Yuans (CNY).
  • bitUSD (BITUSD). A stablecoin issued on BitShares blockchain and backed by USD.
  • bitEUR (BITEUR). A stablecoin issued on BitShares blockchain and backed by Euros (EUR).
  • Stasis Eurs (EURS). A collateralized ERC-20 stablecoin pegged to the EUR.
  • nUSD (NUSD). An ERC-20 stablecoin issued by the Havven foundation.
  • White Standard (WSD). A USD-pegged stablecoin for global payments issued on Stellar protocol.

FAQs

How much is 1 USD Coin to buy?

At time of writing, USD Coin is trading at $1. This is extremely typical. The value of USD Coin is directly tied to the value of one US Dollar, so the value of one USD Coin will rarely be more or less than $1. 

Is USD Coin actually safe?

All cryptocurrencies come with risk. With that being said, USD Coin is one of the least risky coins you can invest in. The value of USD Coin is tied to the US Dollar, so, unless the dollar collapses, USD Coin price will remain stable. 

Does the government issue USD Coin?

No. The US government plays no role in issuing or managing USD Coin. It is not a central bank digital currency or a form of digital fiat currency. Centre and Circle, two cryptocurrency powerhouses who work with Coinbase, manage USD Coin.