The 2018 bear market has been a wake-up call for many crypto investors to look into ways they can edge the market risks. Since gains and losses are measured against the US dollar, it is crucial to have a USD-pegged cryptocurrency that can serve as a guard.
There are a number of stablecoins already. The most popular being the USD Tether. But long-term suspicions and recent rumours about Tether has greatly affected the credibility of the stablecoin. Other stablecoins like TrueUSD and Gemini dollar have yet to penetrate the market as Tether has.
So Coinbase and Circle have decided to create a partnership which has now announced the creation of a new stablecoin, USDC, a stablecoin fully collateralized by US dollars.
The Coinbase-Circle Partnership
Coinbase and Circle forged an alliance with the founding of the Center Consortium. This consortium is the support structure of the USDC. The vision of Center is to provide technological solutions for the mainstream use of stablecoins.
Center intends to create other fiat currency stablecoins such as the EURC (euro-collateralized), JPYC (yen-collateralized), and GBPC (pounds-collateralized).
The USDC Stablecoin
USDC is a fully collateralized US dollar stablecoin based on the open source framework (that is also asset backed) developed by Center. One USDC is equal to $1 USD on the Ethereum blockchain. Each USDC corresponds to a US dollar held in accounts subject to regular public reporting of reserves.
Beginning on October 23, 2018, Coinbase customers in supported regions can buy, sell, send, and receive USDC on the Coinbase platform and on the iOS and Android apps. US customers outside New York State can buy and sell. Other customers around the world can send and receive. Other areas are expected to be eligible as time goes on.
The USDC is not yet available on Coinbase Pro. It is expected to be available in the coming weeks. However, it is already possible to store USDC on Coinbase as it is an ERC-20 token.
USDC Use Cases
Coinbase customers can now send cryptocurrencies without the fear of the value dropping. Large payments as well as small payments can be settled by transacting between two ERC-20 wallets.
The stablecoin will also be useful in dapps, blockchain games and exchanges. As an ERC-20 token, USDC can be used to make in-app payments of dapps that support the ERC-20 standard.
Also, developers and fintech companies can write programs for the USDC on the public Ethereum blockchain.
The video below by Coinbase introduces USDC stablecoin in a simple way.
The introduction of a stablecoin by Coinbase is a development that shows that the crypto market is maturing. Coinbase customers around the world will have the opportunity to take advantage of the stability of the US dollar in their transactions. This is expected to have a positive impact on the crypto world.