The leading US-based cryptocurrency exchange says that one dollar-pegged stablecoin will play an important role within the transforming financial landscape.
In a new blog post, Coinbase says US Dollar Coin (USDC) will be a key component of the broader revolutionary changes as adoption of digital currencies expands.
USDC was co-created by Coinbase and Circle as part of the CENTRE Consortium back in 2018, and now Coinbase explains why the stablecoin will stand out from its competitors.
“Stablecoins provide a bridge between the traditional financial system and the cryptoeconomy, allowing fiat currencies to exist in a form that can move more freely and more efficiently on blockchains.
The value of many cryptocurrencies can fluctuate by the minute, so holding an asset like USDC gives buyers and sellers the stability and confidence they need in times of volatility.
The stability of USDC comes from the fact that it is backed by one US dollar or asset with equivalent fair value held in accounts with US regulated financial institutions – the defining feature of a fiat-backed stablecoin (as opposed to a crypto-backed or algorithmic stablecoin).”
The firm goes on to list several ways that USDC can benefit the worldwide economy:
- Expanding financial inclusion to underrepresented aspects of society.
- Efficient and low-cost international transfer of assets.
- Acting as an “on-ramp” to Web 3.0.
- Paying for goods and services to merchants.
Coinbase adds that USDC can be useful for retail users as well as developers and larger institutions.
At time of writing, US Dollar Coin is the fourth-largest crypto asset with a market cap of $53.5 billion.
Coinbase offers a concluding message about stablecoins and USDC,
“We believe crypto will help create an open financial system that is both more efficient and more equitable, and that USDC will be a key component of this new paradigm.”
?STABLECOINS 101?
We believe stablecoins like #USDC can be the foundation for innovation in a new era of financial services.
But what are stablecoins? Why do they matter? Let’s dive in…???
— Coinbase (@coinbase) August 15, 2022
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