This week, the Goldman Sachs-backed company Circle launched a new stablecoin—joining a growing trend in the crypto space. The new virtual currency will be known as USD Coin (USDC) and will start to be traded at the Poloniex exchange. Its value will be linked to the US dollar.
Circle Launches Dollar Coin
There is a new stablecoin in the market. Circle decided to launch a regulated and industry-backed a virtual currency tied to the US dollar. In the official statement, Circle showed the support provided by over thirty different companies.
Although Poloniex is going to be the first exchange accepting USDC, there are many other platforms that will list it. Some of them are OKCoin, KuCoin, Digifinex, Coinplug, XDAEX, and CoinEx. At the same time, several wallet providers will be offering support for the USDC as well.
The stablecoin has been launched not only by Circle but also the CENTRE open source consortium. With this currency, Circle wants to provide a tool to hedge against the volatility in the crypto market.
The official press release uploaded by Circle reads as follows:
“The major application for fiat stablecoins over the last 18 months has been as a mechanism for trading and hedging in global crypto capital markets. Investors and traders need seamless on and off-ramps for fiat currency into the exchange ecosystem and need to be able to hedge in and out of volatile crypto assets as well as move stable value across exchange venues to seek arbitrage and liquidity opportunities.”
Circle’s stablecoin project started after raising $110 million dollars during a funding round four months ago. The company wanted to launch a stablecoin and provide the market stability.
The stablecoin is based on Ethereum’s ERC.20 standard and there are no fees for converting USD to USDC. However, there will be a small fee of 0.1% when USDC is converted to fiat.
CENTRE will be in charge of monitoring and controlling USDC issuance. Those interested in issuing USDC will have to be compliant with the consortium’s rules.
The USDC coin is not the only stablecoin in the market right now. There are several other competitors that have been launched recently and a long time ago. For example, we wrote at UseTheBitcoin that the Winklevoss Twins launched their stablecoin known as Gemini Dollar (GUSD). This stablecoin has been approved by US regulators and will be audited by several third parties.
Carlos is an international relations’ analyst specializing in cryptocurrencies and blockchain technology. Since 2017, Carlos has written extensively for UseTheBitcoin and other leading cryptocurrency sites; with over 2,000 articles published.