Bridged USDC (Polygon PoS Bridge) (USDC.E)
USD Coin (USDC) is a digital stablecoin that is pegged to the United States dollar. It was launched in 2018 as a collaborative project between Circle, a global financial technology firm, and Coinbase, a leading cryptocurrency exchange platform. USDC aims to combine the benefits of cryptocurrencies, such as fast transactions and global reach, with the stability of the U.S. dollar.
The purpose of USD Coin
USD Coin was created with the goal of providing a stable and reliable digital currency that could be used for various purposes, including digital payments, trading, and as a stable store of value within the cryptocurrency ecosystem. By maintaining a 1:1 peg with the U.S. dollar, USDC offers a digital asset that is not subject to the extreme volatility often seen in other cryptocurrencies.
| Ticker | USDC.E |
| Category | Stablecoins |
| Website | https://www.circle.com/en/usdc |
| @circle | |
| Contract Addresses | |
|---|---|
| polygon-pos | 0x27...74 Copied! |
How USD Coin works
Blockchain technology
USD Coin operates on blockchain technology, which provides transparency, security, and efficiency. The coin is issued on multiple blockchain networks, including Ethereum, Solana, and Algorand, allowing for interoperability and flexibility in its use. By leveraging smart contract technology, USDC ensures that transactions are executed swiftly and accurately.
Issuance and redemption
USDC is issued by regulated financial institutions and is fully backed by reserves of U.S. dollars held in segregated bank accounts. This backing ensures that each USDC in circulation can be redeemed for one U.S. dollar, instilling confidence in its value. To issue USDC, a user must deposit U.S. dollars with a USDC partner institution, which then creates an equivalent amount of USDC tokens. Conversely, to redeem USDC for U.S. dollars, the process is reversed.
Transparency and audits
To maintain trust in the value and backing of USDC, the reserves are subject to regular audits by third-party accounting firms. These audits verify that the reserves match the amount of USDC in circulation, ensuring that the stablecoin remains fully collateralized.
Use cases for USD Coin
Digital payments and remittances
USDC can be used for digital payments and cross-border remittances, offering a fast and cost-effective alternative to traditional banking methods. Its stable value makes it an attractive option for businesses and individuals looking to transact in a digital currency without the risk of significant value fluctuations.
Decentralized finance (DeFi)
USDC plays a significant role in the decentralized finance (DeFi) ecosystem, where it is used as collateral in lending, borrowing, and yield farming protocols. Its stability and liquidity make it a preferred choice for DeFi participants seeking to minimize risk while maximizing returns.
Trading and hedging
Traders and investors often use USDC as a tool for hedging against volatility in the cryptocurrency market. By converting volatile assets into USDC, users can protect their holdings from sudden price swings while still remaining within the digital currency space.