Coinbase Partners With Circle To Launch USDC Stablecoin
Coinbase, the largest US cryptocurrency broker, has introduced a stable coin named USD Coin (USDC), marking the availability of the first stablecoin to trade on the platform. The information was revealed at the Money 20/20 conference Oct. 23.
The technology that powers USDC was developed jointly by Coinbase and Circle, the Goldman Sachs supported, blockchain-based payments processing company.
Clients of Coinbase will be able to buy, sell, transmit and receive USDC through the iOS and Android apps offered coinbase.com, at supported jurisdictions. Coinbase further states that its US-based clients outside New York will be only able to buy and sell, while clients across the world can even send and receive the coin.
The crypto exchange also revealed the USDC will soon be offered to clients of Coinbase Pro, but is already supported on Coinbase Wallet. Coinbase has also stated that more jurisdictions will be supporting the stablecoin in the future. Notably, the coin is 100% collateralized with the US dollars held in accounts that will undergo regular auditing. Coinbase President and COO Asiff Hirji had the following to say at the Money 20/20 conference in Las Vegas:
“We are issuing stablecoins backed 1:1 with the U.S. dollar, completely audited, completely transparent. We think this is a key step toward unlocking innovation in crypto.”
A stablecoin is a crypto currency pegged to another stable asset such as the US dollar or gold. It is basically designed to minimize price volatility. A stablecoin derives its value from the stable asset that backs it. The stable asset is held by a regulated third party.
It can be remembered that controversial stablecoin Tether (USDT) temporarily lost its peg to the US dollar earlier this month. At that time, USDT dropped to a low of $0.91 before reaching $0.975 levels. The panic selling was triggered by rumors that crypto exchange Bitfinex was facing insolvency. The CEO of both Bitfinex and Tether is the same.
Following Tether’s volatility, cryptocurrency investor and fund manager Michael Novogratz said that USDT should ensure more “transparency” about its operations. Novogratz further said that he believes “Tether didn’t do a great job in terms of creating transparency,” while also highlighting that “the concept of stablecoins makes sense.”