A new USD-pegged cryptocurrency known as a ‘stablecoin’ is in the latest cryptocurrency news, this time issued by the $3 billion Bitcoin startup Circle that is backed by the investment banking giant Goldman Sachs. The stablecoin will basically represent another altcoin whose value is pegged to the U.S. dollar and backed by physical currency stored in company-owned bank accounts.
Named USD Coin (USDC), the coin will allow individuals and institutions to tokenize physical currency for use in overseas trading as well as other cross-border transactions in need of rapid settlement.
The co-founders of Circle, Jeremy Allaire and Sean Neville, expressed their excitement about the new announcement, stating:
“When we founded Circle five years ago, we and many in the crypto community envisioned fiat money and financial contracts executing on top of distributed public network infrastructure, building on open standards that would allow us all to share value as instantly and easily as we can access content in web browsers and exchange messages in email and messaging apps. Just as HTTPS, SMTP and SIP enabled free borderless information sharing and communications, crypto assets and blockchain technology will enable us to exchange value and transact with one another in a similar way: instantly, globally, securely and at low cost.”
However, this is not the first time the market is hearing about Circle’s stablecoin. USDC was previewed back in May this year, in tandem with the announcement that the company (Circle) achieved a $3 billion valuation following the Series E funding led by the Bitcoin mining giant Bitmain.
Unlike most of the other USD-backed stablecoins, Circle will not be the only issuer of USD Coin. Instead, the token will have multiple users in the future – as more organizations join CENTRE, which is an open-source consortium launched to develop a decentralized network of fiat stablecoins.
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‘’Paxos is leading the digital trusts space and we are excited to work with them in developing our native stablecoin.’’The Paxos co-founder and CEO Rich Teo pointed out:
‘’NYDFS’s approval of BUSD is a vital step towards long term stability in global crypto markets. We are proud that our stablecoin as a service offering enables trusted companies like Binance to introduce products customized for their users.’’The news comes as an earlier announcement that Binance will launch a subsidiary called Binance US meant for the traders in the United States. In the second half of 2019, the exchange should expect some more developments since in July Binance opened the doors for margin trading services allowing users to place the leveraged orders. The largest cryptocurrency also revealed the plans to create Venus which is a ‘’regional version’’ of Facebook’s Libra in order to establish financial hegemony. As per the reports in the best cryptocurrency news sites, Binance launched a platform that allows the traders to lend their BNB, ETC, and USDT and to also receive a certain annualized interest rate.
Third Audit Attestation Of USDC Stablecoin Reserves Released By Circle
“As of the Report Date and Time, the issued and outstanding USDC tokens do not exceed the balance of the US Dollars held in custody accounts.”USDC is a stablecoin that is based on the Ethereum (ETH) ERC20 token which was first announced in May 2018 after Circle successfully raised $110 million from investors. The CEO of Circe Jeremy Allaire explained more about USDC by saying:
“It’s a version of fiat that can move at the speed of the Internet with global reach, with much less cost, with high levels of security. It’s a huge improvement for how fiat money transmission can work around the world for consumers and for businesses who might want to collect digital payment with tokens.”Circle’s third audit attestation on the stablecoin, shows that the company has a surplus of US dollar reserves that are able to back the circulating coins. The first one was published in November 2018. Also, back in December, the USDC stablecoin was added to one of the largest crypto exchanges in the world-Binance after getting listed on Huobi and OKEx both in October.
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“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.”For those who don't know the concept of a stablecoin, it is basically a digital currency that is tied to another stable currency like the US dollar - primarily designed to minimize price volatility. Its value is based on the value of the backing fiat currency which is held by a third party which is a regulated financial entity.
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