The leading US-based cryptocurrency exchange says a dollar-pegged stablecoin will play an important role in the changing financial landscape.
In a new blog post, Coinbase says US Dollar Coin (USDC) will be a key part of the wider revolutionary changes as digital currency adoption grows.
USDC was co-created by Coinbase and Circle in 2018 as part of the CENTER Consortium, and now Coinbase explains why the stablecoin will stand out from its competitors.
“Stablecoins bridge the gap between the traditional financial system and the crypto economy, allowing fiat currencies to exist in a form that can move more freely and efficiently on blockchains.
The value of many cryptocurrencies can fluctuate by the minute, so holding assets like USDC gives buyers and sellers the stability and confidence they need in times of volatility.
USDC’s stability stems from the fact that it is backed by one US dollar or assets of equivalent fair value held in accounts with US regulated financial institutions – the defining characteristic of a fiat-backed stablecoin (as opposed to a crypto-backed or algorithmic stable coin).”
The company then lists several ways USDC can benefit the global economy:
- Extend financial inclusion to underrepresented aspects of society.
- Efficient and low cost international transfer of assets.
- Act as a “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 the time of writing, US Dollar Coin is the fourth largest crypto asset with a market cap of $53.5 billion.
Coinbase offers a closing: message about stablecoins and USDC,
“We believe that crypto will help create an open financial system that is both more efficient and fairer, and that USDC will be an important part of this new paradigm.”
We believe that stablecoins like #USDC can provide the foundation for innovation in a new era of financial services.
But what are stablecoins? Why are they important? Let’s dive in…???
— Coinbase (@coinbase) August 15, 2022
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