What is USDC?

USDC stands for US Dollar Coin. USDC is a digital currency backed by the US dollar. What this means is that the value of USDC follows the value of a US dollar at any given time.  The USDC is a tokenised dollar, a dollar in token or crypto form which makes it more stable than the average stablecoin.

So, what is a stablecoin? A stablecoin has their value pegged against a currency, in this case, the US dollar and it does not follow the erratic trends commonly associated with the crypto market whether uptrend or downtrend. It serves as an anchor of stability for all other coins because their values are tied to the dollar.

The USDC is pegged to the US Dollar at 1:1. What happens is that for every one USDC created, a US dollar currency note is deposited into a regulated banking institution. To receive one dollar, one USDC is burned and the dollar deposited into your account.

Who created USDC?

USDC is managed by a consortium, a group of companies, called Centre. The group comprises the cryptocurrency exchange Coinbase, and a peer-to-peer payment technology company called Circle.

By investing in USDC, you can start seeing the benefits from the very next day. With interest compounding daily, you can see the returns on your investments grow quicker.

How does USDC work?

Circle has developed a way to ensure that USDC stays pegged to the dollar by ensuring that each dollar you pay for a USDC is held as cash and short-duration US treasuries in Circle’s accounts.

These accounts sit in US regulated banks and financial institutions. This is done in three easy steps:

Step 1: User sends funds in US Dollars

USD is sent to the token issuer's bank account by the user.
The user then receives the minted USDC into their wallet account, and the US dollars equivalent is held in the reserve.

Step 2: Smart contract activated

The issuer uses the USDC smart contract to create an equivalent amount of USDC.

Step 3: User receives USDC

The user then receives the minted USDC into their wallet account, and the US dollars equivalent is held in the reserve.

Circle goes a step further ensuring that their process is transparent. They work with independent auditors to verify and release regular reports on their US Dollar reserves to prove that for every 1 USDC in existence, there is 1 US Dollar sitting in the bank.

USDC was built on the Ethereum Blockchain as an ERC-20 token, but it can be used on other blockchains, like Algorand, Stellar, Tron, Solana, Avalanche and Hendera too

What can I do with USDC?

USDC has been proven to have a lot of use cases here are a few of them

USDC is a reliable store of value.

Compared to most coins on the Crypto market heavily affected by volatility (The upswings and downswings of the market). USDC is pegged to the dollar, meaning it doesn't react to the market like other coins. The only downside to this is that its value would be affected by inflation of the dollar and any movement of the dollar on the Forex market.

USDC is a gateway token for cryptocurrency users

Due to the ease of exchanging dollars for USDC and its stability, it is often used as a gateway currency. If you intend to trade or invest in the Crypto market, you would need a stablecoin first, and USDC plays this role well.

USDC makes international money transfers easier

USDC is also used for international transactions with ease. Since it is the token form of dollars which is a global exchange fiat, USDC can be used for international exchange. It also has the added advantage that you do not necessarily need a bank account to keep USDC making transactions faster.

Earn interest on USDC with Chillur

With Chillur Earn, you can earn interest on your USDC holdings every day. In addition, there are no lock-in periods and you have the freedom to add and withdraw funds whenever you want. As long as you have a USDC balance, you earn interest every day.

How is USDC different from TerraUSD (UST)?

UST refers to TerraUSD and it is a stablecoin that is built on the Terra blockchain rather than the fiat dollar. It uses a system where to mint a UST, you have to buy a dollar's worth of LUNA and exchange that LUNA for the UST. This means that to create $1 worth of UST token, you would have to burn $1 worth of LUNA and vice versa.

In crypto terms, burning doesn't mean setting the coin on fire since they are not tangible assets, rather it involves destroying the burnt coin or token by sending it to a frozen wallet from which it cannot be recovered.

Here are a couple of key differences between USDC and UST.

USDC is pegged to the US Dollar

Its base currency is a major difference between USDC and UST. As we have highlighted above, USDC is pegged to the dollar, which means for every USDC you have you can exchange it directly for an equivalent amount in dollars. UST on the other hand has a go-between which is LUNA, while UST is also pegged to the dollar, LUNA plays the role of an all-important middleman in this transaction.

USDC has fiat reserves to ensure stability

Another major difference that stems from the above is fiat reserves. USDT has 100% of its tokens in cash reserves in reputable banking institutions across the US. On the other hand, UST does not have these reserves.

USDC is available on multiple blockchains

One more difference between both stablecoins is the number of blockchains they are available on. USDT started in the Ethereum Blockchain but it has since expanded and it is available and compatible with multiple blockchains including Solana and Tron. On the other hand, UST is only available on the Ethereum and Terra Blockchains.

Essentially, if you are looking for which coin is much more stable between these two stablecoins, USDC has proven that it is definitely a genuine stablecoin with a bright future.

How to buy USDC in Australia?

You can buy USDC through any digital currency exchange. All digital currency exchanges in Australia are regulated by AUSTRAC.

Chillur is an Australian digital currency exchange, registered and regulated by AUSTRAC that simplifies the process of buying the USDC token in Australia.

You can buy USDC in Australia using Chillur in two easy steps.

Step 1: Create an account

Create your Chillur account using an email address and password. You will then need to verify your identity using either your passport or drivers licence.

Step 2: Transfer funds to your account

Use your banking app or web banking to transfer funds to your Chillur account.

Once the funds settle (1-2 business days), the system will automatically buy USDC as part of the Chillur Earn product.

Congratulations! You now own USDC in your Chillur account

How to invest in USDC?

By investing in USDC, you can start seeing the benefits from the very next day. Unlike traditional cryptocurrency investing, that involves buying small amounts of cryptocurrency with the expectation that it will increase in value in the long terms, with USDC, you can earn interest in your holdings daily.

You can invest in USDC using Chillur in three easy steps.

Step 1: Create an account

Create your Chillur account using an email address and password. You will then need to verify your identity using either your passport or drivers licence.

Step 2: Buy USDC as part of Chillur Earn

Chillur Earn enables you to earn daily interest on your USDC holdings.

The bigger your USDC balance, the more you earn every day in compound interest.

Step 3: Track your investment performance

Simply login into your Chillur account and track the performance of your portfolio either through a laptop or your mobile phone.

Where do I store my USDC?

When you invest in USDC through Chillur, we will store your USDC (along with the other cryptocurrencies that you buy) for you.

How to store my IOTA - Chillur

If you invest in USDC on your own, you would need to store your USDC in a crypto wallet. The best place to store your USDC is either a software or a hardware device.

USDC tokens can be stored in some Ethereum wallets because USDC is built on top of the Ethereum blockchain. For example, MyEtherWallet is a web-based wallet that can be used for storage and it’s an Ethereum wallet.

For longer storage, it is best to store your USDC tokens in a hardware device/ wallet such as Trezor or Ledger.

What's next for USDC

USDC has a proven track record for stability and this is quite good for its future. Unlike UST, USDC's problems can only come if the dollar faces any major crisis. It is fair to say that USDC'S importance will continue to grow amongst crypto users and would eventually become a much more common transaction token even for those who do not actively trade on the crypto market because of its ease of transfer across borders.

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