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Coinbase Now Offers a Stablecoin Tied to the US Dollar
FinTech, Blockchain, Financial Services
About a month after Circle launched its first stablecoin – known as the USD Coin or USDC – Coinbase announced in a blog post that it will now allow U.S. customers outside of New York to buy, sell, send and receive the USDC – making it the first stablecoin offered by the popular cryptocurrency exchange.
Users will be able to access the USDC on Coinbase.com and the company’s iOS and Android apps. Coinbase said in its blog post that the USDC will be available in additional “geographies” at a later date.
A stablecoin is tied to the US dollar, which means that 1 USDC is equal to 1 USD. In other words, a stablecoin will not fluctuate wildly with volatility like Bitcoin and other cryptocurrencies – hence, it’s stable.
Each USDC is 100% collateralized by a corresponding USD held in accounts subject to regular public reporting of reserves. 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.
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.
As mentioned in its blog post, Coinbase and Circle have teamed up to launch the CENTRE Consortium, “a joint venture aimed at establishing a standard for fiat on the internet and providing a governance framework and network for the global, mainstream adoption of fiat stablecoins.” The CENTRE’s role will be crucial to defining the policies around the USDC because, as TechCrunch notes, “stablecoins need to be regulated more tightly” than other digital coins.
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