One of the world’s largest cryptocurrency exchanges Binance announced that it would be adding stablecoin USD Coin (USDC) to its platform. The exchange has already opened deposits for USDC and will begin trading in BTC and BNB pairs starting Saturday, 3 am UTC. USDC is the first fungible and interoperable USD-backed coin in the crypto industry.
USDC’s Fate Locked With Big Exchanges
The USD Coin is a fully collateralized, ERC20 stablecoin that is pegged to the US Dollar based on the open source fiat stablecoin framework developed by Centre – a consortium established by Coinbase and Circle. The coin provides users the ability to tokenize their US Dollars and trade in digital currencies with relative ease. The price of one USDC is equal to one US Dollar.
USDC was launched only recently but has managed to gain the attention of exchanges worldwide. It was recently listed by the Huobi Group and became a part of the HUSD program that lets users hold all their stablecoins under a single HUSD balance and withdraw in any stablecoin of their choice. This goes to show that the coin has some potential and will likely gain more ground amongst the investors.
The Stablecoin Problem
Stablecoins are pegged to a stable instrument like the USD. The USD Coin, Tether, Gemini Dollar and Paxos Standard Token are all coins that are pegged 1:1 to the dollar. This means that every coin in circulation is backed by 1 USD in reserve. When it comes to Tether, the controversies often mar the valuable idea behind a stablecoin which is to provide stability to the volatile crypto markets.
However, a new breed of stablecoins, like Gemini Dollar, Paxos, and the USD Coin are bringing regulation and crypto enthusiasm together. The USD reserves of the coin are scheduled to be audited by independent accounting firms, which provides more transparency to their operation.
The creators of Centre, Circle and Coinbase are certain that interest in a compliant, transparent and fungible stablecoin will continue to grow in the crypto market.