USD Coin (USDC) is a stablecoin launched in 2018 by Centre, which is a consortium created by Circle and Coinbase. USDC is open source, which means anyone can use it — not just Circle and their partners.

USDC along with tether (USDT) equates to more than 80% of total market capitalization for all U.S. dollar-pegged stablecoins. Though USDT has the largest market capitalization among all stablecoins, USDC has its advantages and differences among its peers.

USDC is basically a tokenized version of the U.S. dollar (USD). It is fully redeemable, meaning you can trade it for the same amount of cash you deposited to create your account. Unlike some stablecoins linked to the price of a single asset or basket of assets, USDC's value is tied directly to the U.S. dollar and backed by collateral held in trust by third parties.

The USDC protocol was made to provide better access to cryptocurrencies to the general public. The goal behind USDC is to help the cryptocurrency sector become more user-friendly.

USDC was also developed in order to be used by businesses and individuals alike. As USDC provides an open-source smart contract, this allows other companies to develop their own blockchain products, such as wallets and exchanges. However, those who want to use the U.S. dollar as a payment or reward system for their customers, employees or partners can access these services easily through USDC's Payouts solution.

USDC was developed to be used in place of the U.S. dollar in the crypto world and make it easy to exchange and use it. As it's pegged to the U.S. dollar, you can rely on its consistent value even as the value of other cryptocurrencies fluctuate.

To convert your U.S. dollars or whatever fiat money you have into USDC, you'll need to do three things:

Register an account with a partner exchange that supports USDC.Deposit fiat currency into your account with the exchange by way of wire transfer, credit card or bank account.Buy USDC with your fiat currency.

On the other hand, you can convert your USDC into fiat currency by doing the following:

A user asks the exchange platform to convert any number of USDC tokens for fiat.The exchange then sends a request to the USDC smart contract to convert their tokens for fiat and remove an equivalent number of tokens from circulation.The issuer sends back your requested amount of fiat to your bank account equaling the USDC tokens minus incurred fees.

In contrast to other stablecoins, the team behind USDC commits to providing complete transparency and partners with financial institutions in maintaining its fiat reserves – a unique feature for a stablecoin. USDC exchanges and partners are obligated to report their U.S. dollar holdings regularly.

Read more: What's the Point of Stablecoins? Understanding Why They Exist

USDC is a stablecoin that is issued by Circle and Coinbase. They are part of the Centre Consortium, a group of companies working together to build the next generation of digital money.

The difference between USDC and other stablecoins is that it is fully backed by USD held in Centre's reserves. They use a combination of collateralized reserves and multiple legal entities to reduce counterparty risk for any given transaction.

USDC has been used as a substitute for U.S. dollars on major exchanges, such as Coinbase, Kraken, Binance, Poloniex and Gemini.

USDC has been recently approved by the U.S. Securities and Exchange Commission (SEC) as an eligible investment for investors who are accredited. Primarily, USDC differs from other stablecoins in three general ways:

USDC has been transparent and proactive in creating safeguards in the event of a future government investigation.USDC is fully backed by fiat collateral and not dependent on the potential future value of its use case or the value of other cryptocurrencies like some other stablecoins are.USDC is supported by Circle's Prime platform, which gives Circle access to real-time data and analytics about how customers are using their USDC holdings through the Circle Trade platform or over-the-counter (OTC) desk.

Many regulated institutions have been hesitant to enter the crypto market because of its lack of regulation and security. As USDC is fully backed by U.S. dollars, one of USDC's core value propositions is that a financial institution can hold it without fear of fluctuation. This is an important step forward for the crypto market, as it allows regulated institutions to begin offering crypto products without worrying about volatility risk.

Purchasing USDC won't provide any investment returns for buyers because it was designed to be a stablecoin. However, the benefits of buying this cryptocurrency are more about how useful it is rather than how much money you can make from an increase in price.

Based on its characteristics alone, USDC makes it a viable solution for businesses and individuals to transfer money in a matter of seconds while also saving them time and money by eliminating the need for banks or other middlemen.

Read more: Algorithmic Stablecoins: What They Are and How They Can Go Terribly Wrong

This article was originally published on Jun 3, 2022 at 9:09 p.m. UTC