USD Coin becomes the first stablecoin on Luno
??? NEW COIN ARRIVAL ???
Here’s the lowdown on what to expect, why people are buying it, and how to get it.
*Please note, USDC is also not currently available in Malaysia.
What is USDC?
USDC is a stablecoin. A stablecoin is a cryptocurrency that’s pegged to a single underlying asset, or a basket of assets. In the case of USDC, it’s pegged to a single asset: the US dollar. Essentially, what USDC is doing is creating a ‘digital dollar’ by tokenising it and putting it on the blockchain.
Why would I need that?
Stablecoins are a bridge between the old financial system and the new. A digital version of the US dollar has a number of benefits over its paper counterpart. For one, it’s easier to transfer and can be moved anywhere in the world almost instantly. The ‘fiat version’ of the US dollar moves slowly because it has to contend with traditional financial institutions, their legacy processes, jurisdictional regulations, and so on. USDC bypasses these barriers. Tokenising the US dollar also provides additional functionality, making it easier to program with and to use in dApps.
What can I use it for?
People use USDC for a wide variety of reasons. One of the primary reasons is to hedge against volatility during bigger market movements – either in cryptocurrency or your own local currency. In countries where the local currency is more prone to volatility, holding USDC allows you to store your wealth in a currency that is historically more dependable as it’s still the world’s reserve currency.
Another use case is for when you’re selling crypto. When you sell, you may want to keep your funds on the platform. If you keep it on there as USDC, you don’t have to pay the fees to withdraw and deposit.
Why USDC and not another stablecoin?
USDC has a market capitalisation of over $5 billion. There are a number of stablecoins out there that you may have heard of, such as Tether. We believe that USDC holds a number of advantages over these other coins, particularly when it comes to safety.
USDC is fully collateralised. This means that its reserves are held on a 1:1 ratio with the US dollar. So, for every 1 USDC out there, the original issuer of the coin holds 1 US Dollar in collateral. This is supposedly true of other stablecoins, but USDC is unique in that it’s issued by financial institutions who say they operate using the highest standards of corporate governance and commit to providing full transparency. All USDC issuers must report their USD holdings, which are in turn published by accountancy firm Grant Thornton LLP on a monthly basis. These monthly reports are available online to anyone who wishes to view them. This means you can be confident that USDC is always 100% redeemable for dollars.
USDC is governed by Centre, a membership-based consortium that sets technical, policy and financial standards for stablecoins. Centre consists of Circle and Coinbase. These are two of the most established companies in the cryptocurrency space, with a long track record of reliability, success, and following strict regulations.
How do I get a USDC Wallet?
There are two ways to create a USDC Wallet:
1. When you select your USDC trading pair on the Luno Exchange, and place an order, a new USDC Wallet will automatically be created for you which will be used to store your newly traded USDC.
2. Another way to create an USDC wallet is by manually adding it to your account.
Read more about how to set up your USDC Wallet.
Can I send USDC to Luno?
You can send USDC to and from Luno the same way you send other cryptocurrencies through Luno. Just provide the sender with either your USDC receive address or your QR code. You can find these under Receive in your USDC Wallet under Wallets on the menu bar.
Learn more about how to send and receive USDC with Luno.
Our team is ready to help with any queries you may have, feel free to reach out to us on Twitter or create a support ticket.
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