USDC is a stablecoin that is pegged to the U.S. dollar on a 1:1 basis. Every unit of this cryptocurrency in circulation is backed up by $1 that is held in reserve, in a mix of cash and short-term U.S. Treasury bonds. The Centre consortium, which is behind this asset, says USDC is issued by regulated financial institutions.
The stablecoin originally launched on a limited basis in September 2018. Put simply, USDC’s mantra is “digital money for the digital age” — and the stablecoin is designed for a world where cashless transactions are becoming more common.
Several use cases have been unveiled for the USDC. As well as providing a safe haven for crypto traders in times of volatility, those behind the stablecoin say it can also allow businesses to accept payments in digital assets, and shake up an array of sectors including decentralized finance and gaming.
Overall, the goal is to create an ecosystem where USDC is accepted by as many wallets, exchanges, service providers and dApps as possible.
The Founders of USDC
The Centre Consortium has two founding members. One of them is the peer-to-peer payment services company Circle, while the other is the Coinbase cryptocurrency exchange. Other crypto ventures are open to join this consortium.
Explaining the rationale behind USDC, Circle co-founders Jeremy Allaire and Sean Neville wrote: “We believe that an open internet of value exchange can transform and integrate the world more deeply, eventually eliminating artificial economic borders and enabling a more efficient and inclusive global marketplace that connects every person on the planet.”
In 2020, Circle and Coinbase collectively announced a major upgrade to USDC’s protocol and smart contract. The goal of these enhancements is to make it easier for USDC to be used for everyday payments, commerce and peer-to-peer transactions.
USDC Asset Reserves
Following the collapse of TerraUSD, stablecoin issuers have been under intense scrutiny over the quality of the reserves backing their tokens. In a transparency move, Circle Internet Financial LLC (Circle), the issuer of the USDC stablecoin released its reserves report as of July 31, 2022.
According to the report, the total USDC reserves held by the company consist of $42.3 billion worth of US Treasury Securities and total cash deposits of $12.2 billion. The monthly reserve report was issued by leading global accounting firm Grant Thornton.