- Circle is rolling out a digital version of the U.S. dollar with a cryptocurrency pegged to the currency.
- There are a number of banks who are excited about it and will support it.
- The objective of the consortium is to encourage the adoption of cryptocurrencies.
Coinbase is partnering with Circle to launch a joint support for a Stablecoin dubbed the United States Dollar Coin (USDC) that will be a cryptocurrency Stablecoin pegged in the U.S. Dollar. The aim of the consortium is to avail the transaction of USD with the power of a cryptocurrency and allow it to transact instantly all over the world in a secure and transparent manner.
Two Heavyweights Unite for Crypto Adoption
The Tuesday, October 23, 2018 announcement by Coinbase cryptocurrency exchange and global finance company Circle said the new partnership will be called CENTRE consortium. The announcement of Coinbase’ blog post explained that the aim is to encourage the adoption of cryptocurrencies. To achieve that goal, Coinbase will support the USD Coin, which is Circle’s Stablecoin, linked to the United States Dollar.
Circle Co-founders Sean Neville and Jeremy Allaire said in their joint statement:
“When I look at the convergence of traditional finance and the crypto space, it’s begging for that, […] there are a number of banks who are excited about it and will support it.”
Coinbase explains in their blog post that Stablecoins differ from other digital currencies because while the value of regular cryptocurrencies like Bitcoin can fluctuate wildly based on market forces, a Stablecoin’s value is linked to that of fiat currency.
Here, the value of one USD Coin will be equivalent to one U.S. Dollar so that for every USD Coin in circulation, the CENTRE Consortium will keep one U.S. dollar in their reserve account subject to a periodic public review. Coinbase wrote further in their review that:
“We see USDC as a major step towards a more open financial system. The advantage of a blockchain-based digital dollar–like USDC–is that it is easier to program, send, use in apps, and store locally than traditional US dollars, […] that’s why we think of it as an important step towards a more open financial system.”
Coinbase announced that beginning Tuesday all its customers in all U.S. states save for New York could buy and sell the USD Coin through their exchange while customers in other parts of the world could trade the cryptocurrency with one another.
Stablecoins the Future?
The USDC joins a number of Stablecoins and there is hope it will see better days in the crypto realm as dozens of companies were already to support Circle’s Stablecoin with Coinbase being the first one among many. Coinbase added:
“USDC will be coming to Coinbase Pro in the coming weeks, and is already supported on Coinbase Wallet, a user-controlled wallet where people can store ERC20 tokens.”
