USD Coin (USDC)

Trading and Payments

USD Coin is used for buying, selling, and trading crypto quickly on exchanges like Coinbase and OKX. It acts like a digital dollar that can be sent instantly anywhere in the world.

Cross-Border Transfers

People use USD Coin to send money across countries fast and cheaply, avoiding delays common with traditional bank transfers.

Savings and Remittances

It can be held as a global dollar savings account or used to send remittances, making it easier to manage and move money internationally.

Blockchain and DeFi

USD Coin works on many blockchains, enabling decentralized finance (DeFi) apps and other blockchain services to use a stable digital dollar for transactions and contracts.

Business Use

Companies use USD Coin to receive payments instantly from customers worldwide, helping projects and communities get funds quickly and with low fees.

Pros

• Stability: USD Coin is pegged 1:1 to the US dollar, which helps keep its value stable compared to other cryptocurrencies.
• Transparency: It undergoes regular audits and is managed by reputable companies like Circle and Coinbase, increasing trust.
• Speed: Transactions with USD Coin are processed quickly on the blockchain, allowing fast transfers.
• Liquidity: Widely accepted on many major exchanges and DeFi platforms, making it easy to buy, sell, or use.
• Regulatory Compliance: It follows regulations and provides transparency, which appeals to many users and investors.

Cons

• Centralization: USD Coin is issued and controlled by centralized companies, which goes against the decentralized nature of most cryptocurrencies.
• Counterparty Risk: Since it is backed by reserves held by Circle and Coinbase, users depend on these companies' financial health.
• Limited Growth Potential: Because it is a stablecoin pegged to the dollar, it does not offer the same price increase potential as other cryptocurrencies.
• Dependence on Traditional Finance: Its value and operation rely on the traditional banking system and fiat reserves.

Founders

USD Coin was created by the Centre Consortium, a joint venture between Circle and Coinbase. The key founders behind USD Coin are Jeremy Allaire and Sean Neville, who co-founded Circle.

Organizations

• Circle: A peer-to-peer payment services company co-founded by Jeremy Allaire and Sean Neville.
• Coinbase: One of the largest cryptocurrency exchanges, partnered with Circle to launch USD Coin.

Launch

USD Coin was announced in May 2018 and officially launched in September 2018 as a stablecoin pegged to the U.S. dollar.

Main Investors

USD Coin is primarily backed by Circle, a financial technology company, and Coinbase, a major U.S. cryptocurrency exchange. These two companies formed the Centre consortium to create and manage USD Coin.

Other Notable Investors

Besides Circle and Coinbase, other investors include companies like Bitmain, a well-known Bitcoin mining company.

Consortium and Management

Initially, USD Coin was managed by the Centre consortium, but Circle now independently manages it, ensuring transparency with regular audits.

Summary

• Circle and Coinbase are the main investors and creators.
• Bitmain is another notable investor.
• Managed by Circle with oversight from the Centre consortium.

Halal Status of USD Coin

• Yes, USD Coin is generally considered halal by many Islamic finance scholars because it is a fully backed stablecoin pegged 1:1 to the US dollar.
• It avoids elements like riba (interest), gharar (uncertainty), and maysir (gambling) in its core design.
• USDC tokens are backed by actual US dollars and short-term US Treasury bonds held in regulated institutions, with transparent audits.
• Its business model is straightforward and serves legitimate purposes like payments and transfers without speculative features.