USD Coin (USDC) is a digital currency backed entirely by US dollar assets. USDC is a tokenized US dollar, with one USDC coin worth exactly one US dollar. USDC's value is intended to be steady, making it a stablecoin. To achieve price stability, stablecoins are often backed by reserve assets like as dollars or euros. The price stability of USDC stands in stark contrast to the renowned price volatility of other cryptocurrencies such as Bitcoin and Ethereum. Despite its name, USDC is not issued or guaranteed by the United States government. USDC is an open-source project, which means that anybody may read and contribute to its code.

The reserve assets of the USDC are stored in separate accounts with authorized US financial institutions. Grant Thornton, an accounting company, manages these segregated accounts and delivers monthly attestation reports. You might be wondering how USDC maintains its 1:1 peg to the US currency. If you use fiat cash to buy one USD Coin, the fiat currency is deposited and kept as one US dollar, and the new USDC is produced. When you trade a USD Coin for fiat cash, the USDC is burnt when the fiat money is deposited back to your bank account. Good news is that the USD coin is compatible with multiple blockchains, including:

-        Algorand

-        Ethereum

-        Stellar

-        Tron

-        Solana

Advantages and disadvantages

One of the biggest advantages of coins like this is low price volatility. Which, on the other hand can be also a bad thing if you are looking for a quick trading.

The biggest disadvantage in this case would be, that the USDC is not immune to the U.S. dollar price inflation. Meaning, if the value of dollar will fall, it will take the value of USDC with it.

History

The Centre consortium, a collaboration between Circle and Coinbase, created USD Coin. Centre created the technology and the governance structure, while Circle and Coinbase were the initial commercial issuers of USDC. Circle was formed in 2013 by Jeremy Allaire and Sean Neville, two entrepreneurs.

Circle is a recognized Money Transmitter, making the firm a transparent financial book. Money transmitters are money service enterprises in the United States that must follow federal rules and regulations. The comparable amount of USD is with one of Circle's certified partners prior to the issuing of USDC. As a result, all USDC coins are governed, transparent, and verifiable. Circle is also known as the Goldman Sachs-backed cryptocurrency business.