Coinbase announced that Circle’s stablecoin, USD Coin (USDC), will be available for trade on their platform today. Coinbase and Circle also announced their collaboration yesterday, in a joint effort to promote the adoption of cryptocurrencies backed 1:1 with government currencies (also called stablecoins).
“The underlying technology behind the USDC was developed collaboratively between Coinbase and Circle, in our capacity as partners and co-founders of the new CENTRE Consortium” according to a release today on The Coinbase Blog.
USDC is the first stablecoin to list on Coinbase. Users can send and use USDC globally (except for New York State). Each USDC reportedly has a 1:1 backing of U.S. dollars. This is similar to other stablecoins such as TUSD and USDT.
However, the announcement of USDC on Coinbase may be more impactful than previous stablecoin news. Coinbase has a track record of legal compliance.
“The advantage of a blockchain-based digital dollar like USDC is easier to program with, to send quickly, to use in dApps, and to store locally than traditional bank account-based dollars. That’s why we think of it as an important step towards a more open financial system” explained the Coinbase team, via their blog.
USDC is also an ERC20 token, meaning that it runs on the Ethereum network. Ethereum wallets can store USDC, and there are many Ethereum wallet options to choose from in general.
Additionally, Coinbase and Circle together form CENTRE Consortium. CENTRE “aims at speeding up adoption of cryptocurrencies backed by actual government currencies like the U.S. dollar”, reports CNBC. Related: Crypto And Blockchain Acquisitions Hit Record High
Stablecoins have made many headlines over the past few weeks. TUSD, GUSD, PAX, USDT, USDC, and HUSD (among a few others) are all lobbying to gain market dominance as the go-to stablecoin solution.
The problem is that prices for stablecoins have not been “stable” in comparison to the U.S. dollar. For example, at the time of this writing, Tether (USDT) is priced at $0.97, according to Blockmodo’s price feed. GUSD even saw price as high as $1.18 at one point last week, according to coinmarketcap.com.
Historically, it seems as though USDT has the most stable history as far as a price that’s pegged to the U.S. dollar. But USDT has made many headlines in 2018 regarding public fears of insolvency. (Insolvency, in this case, means that USDT might not have enough USD to pay out a 1 USD for every 1 USDT.)
Stablecoins claim to have a 1-1 backing by the U.S. dollar. But lately, prices have seen large swings. Is the market waiting for a single stablecoin to rise from the pack? Or will many survive together?
By Benjamin Pirus via Crypto Insider
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