The USD-Coin (USDC) is a cryptocurrency fully collateralized by US Dollars, issued on the Ethereum blockchain pursuant to a license from U.S. Money Transmittal Licenses. Each USDC is 100% redeemable by law and backed by financial institution(s) held within the United States.
Introduced in September 2018, stable coin projects are becoming increasingly popular as an alternative to other cryptocurrencies that experience high levels of volatility. Stable coins offer price stability relative to national currencies like the dollar or euro, differentiating them from cryptocurrencies like Bitcoin which have historically experienced higher degrees of price fluctuations . Consequently, stable coins can function as both stores of value and mediums of exchange via their ability to maintain relatively stable valuations.
Although not all stable coins are created equal, there is a need for projects that aim to be transparent and trustworthy as the scope of cryptocurrencies expands.
Intrepid Investor seeks to analyze and disseminate information on up and coming currencies which provides insight into potential opportunities and risks involved with investing in said instruments and underlying projects. We recognize that we cannot possibly cover everything so we will focus our coverage on instrument we believe to offer long term potential along with careful consideration of risk associated with each instrument as it pertains to the traditional financial investor. In addition, we will provide insight into trading strategies designed to capitalize on market volatility.
The purpose of this article is to provide an overview of USDC and to share our thoughts regarding its value proposition as well as potential risks involved with investing in this instrument.
In the past, many companies have tried to create a stable coin for traditional finance but all attempts to date have failed due to one common flaw - centralized control of supply and demand as well as pricing which is necessary to maintain a peg through large buys or sell offs. In other words, there was no guarantee that a company would buy back their own coins if they started to become less valuable over time since they could just leave them where they were and let the price "float". This created a lot of fear among investors who didn't want to dump money into an entity that could just blow the money on a yacht rather than buy back coins.
The USDC coin has convinced investors of two things: There is an entity with enough funds to cover collateral at any given time, and there is an entity with the technical know-how to create protocols for buying back their own coins if they ever need to. Source: https://blog.coinbase.com/usd-coin-reimagining-the-stability-of-a-stablecoin/
USD Coin (USDC)…is self regulated, keeping its price stable by acting as more of tokenized dollar that goes through traditional banking or government institutions like your local bank branch or treasury department. If something happens to the entity that's controlling New York's BitLicense, then everyone believes that this also means something bad has happened to the dollar. There are still some people who believe that nothing can be as secure as a government backed currency. The USDC attempts to solve that problem by actually being backed by USDs in reserves and then auditing those balances using third parties. Source: https://medium.com/@usdc_io/guiding-principles-of-the-usdc-2e3f827223bd
An ERC20 token which serves as a reference asset and collateral for the USD Coin stablecoin system . It is fully collateralized by FDIC-insured USD deposits and supported by an extensive set of blockchain based transaction messaging services.
