Launched in 2018 by Circle and the famous crypto exchange Coinbase, USDC is a stablecoin that is fully reserved by cash and short-dated US treasuries, meaning that every coin is always redeemable 1:1 for US dollars. It was built with two objectives in mind. To bring stability in the crypto space and transparency for stablecoins.
Since many investors were concerned about the rival’s USDT legitimacy, Circle decided to release a monthly report as a solution, informing the public about its reserves. This helped USDC to quickly gain the trust not only of crypto exchanges that use it as a fiat alternative but also of retail investors who see it as a haven for their portfolio.
USDC was originally launched on the Ethereum(ERC-20) network and has since expanded to various chains such as Solana, Stellar, Algorand, Matic and more. Its rapid expansion has made it a solution for gambling as well., with a plethora of crypto casinos offering it in their cashier section. Even though the high transaction fees were a problem once due to Ethereum, alternatives such as Solana and Matic solve this and make it a great solution for everyone, no matter their holding size.
What’s the difference between USDC & USDT?
USDC and USDT are the top two (2) stablecoins available in the market, and both share the same functionalities and use by retaining a fixed price. So even though they appear to be the same, they have some key differences you should know of.
To keep their value consistent, both coins are backed by different securities. This means that for every dollar of USDC and USDT existing, the companies that created them have equal amounts of dollars in cash and cash equivalents. Since every dollar can be exchanged 1:1 for cash, this provides the desired stability for the stablecoins.
While USDT is more popular in the crypto space, with more trading pairs and availability by almost all exchanges, there are a lot of controversies surrounding the company that created it. The concerns about Tether not being completely transparent about its reserves make the public worry about the stability of USDT. On the other hand, with its frequent issuing of reports, Circle, the company that created USDC, is gaining investors' trust, making USDC a more favorable stablecoin.