Stablecoin USD Coin, sometimes known as USDC, is supported on the Ethereum, Stellar, Algorand, and Solana blockchains. In the first year alone, more than $1 billion of USDC were produced, making it the most rapidly developing stablecoin in the world. Its goal is to provide a currency for the digital age. Its stability not only protects cryptocurrency dealers but also has the power to completely alter the DeFi market.

In September 2018, Centre Consortium, a partnership between cryptocurrency exchange Coinbase and peer-to-peer payment services provider Circle, released USD Coin. The founders wanted to build an environment in as many wallets, exchanges, and service providers as possible would accept USDC.

As a stablecoin, USD Coin is exchangeable for U.S. dollars at a 1:1 ratio. It is issued by supervised financial institutions and backed by audited completely reserved assets by Grant Thornton, LLP. 

Tether (USDT), TrueUSD (TUSD), Gemini Dollar (GUSD), Paxos Standard Token (PAX), and Dai (DAI), which are all ERC-20 stablecoins tied to the U.S. Dollar, are projects that are comparable to USD Coin.

How the coin works

In a process known as tokenization, Circle ensures that every USD Coin is backed by a U.S. dollar. Three easy steps make up this process:

• A user deposits money into the bank account of the token issuer
• The issuer generates an equivalent number of USD Coins via a smart contract
• The user receives a freshly produced USD Coin while the deposited funds are kept in reserve. 

This guarantees that 1 USD is always held for each USD coin, giving it its stability

Fiat-coin exchange

The process of exchanging your USD Coin for fiat money is equally simple

A user first submits a request to exchange their USDC for USD.

The issuer withdraws an equivalent number of tokens from circulation by exchanging the tokens once more for US dollars using the USDC smart contract.

The desired amount of USD is subsequently transferred immediately from the reserves into the user’s bank account. The user will be given the requested quantity of USD Coin less any costs that were charged.

Benefits of trading USDC

Here are some benefits of trading USDC

Stability

The Center’s innovative fiat-backed stablecoin technology adds stability to cryptocurrency trading. By demonstrating that US dollars are being held in reserve, USDC gains credibility and security. Traders can feel secure knowing that they are holding USDC, a fiat-backed currency that is routinely audited, in a market known for its severe volatility.

Accessibility

Unlike conventional U.S. dollars, holding USDC does not necessitate a bank account and is not location-dependent. You can send USD coins instantly and anywhere in the world with just a mobile phone. Additionally, as the cryptocurrency market is accessible for trading around the clock every day of the year, including holidays, it is possible to exchange USD coins for other cryptocurrencies when other significant marketplaces are closed.

Leverage

Using margin trading is one method a day trader can take to maximize profits. On USDC, many brokers provide a variety of leverage options that can enhance exposure for bigger gains. The usage of multipliers should be done so cautiously because it increases risk and, thus, possible losses.

Liquidity 

The high liquidity of the coin, which is linked to the US dollar, is another benefit. In contrast to other cryptocurrencies, it is simple to make withdrawals at a rate of 1:1 to US dollars. High volumes are advantageous for many trading methods.

Choosing an exchange

There are several things to consider while determining which cryptocurrency broker to choose:

Fees

Charges can come in many different forms, including commission, overnight fees, or percentage cuts of revenues, and they differ greatly from broker to broker. To select a broker with reasonable fees, research is essential.

Leverage 

Various platforms provide a variety of leverage choices. Options with high leverage are a tempting way to increase trading earnings, but they also carry a higher risk of loss. If you plan to trade with leverage, choose a broker that offers low-interest rates.

Accounts

Many platforms offer a tier system for accounts, with distinct features and benefits offered at each level. Even while the cheapest solution could seem the most alluring, more sophisticated options might yield a higher profit over time. It is wise to search for brokers who provide easy withdrawals, competitive spreads, and customizability.