Coinbase and Circle have established a strategic partnership to create a stable coin that will facilitate financial operations within both platforms. With this, the two technology giants join the recent wave of stablecoins that seems destined to become a trend during 2019.
The rise of stablecoins has been a prediction that several analysts such as Tom Lee have helped to strengthen. The creation of reference crypto facilitates the “temporary freezing” of digital assets and the sending of tokens for a fixed value in operations that do not require an immediate swap to dollars or any other traditional currency.
USDC: An ERC20 Stablecoin
In an official press release published on Coinbase’s official blog, the development team explains that they decided to create a stable coin on the Ethereum blockchain to provide more opportunities for developers to use their cryptocurrency on cases beyond the simple transfer of value, which is the main focus of the Omni blockchain (the architecture used by USDT).
The advantage of a blockchain-based digital dollar like USDC is easier to program with, to send quickly, to use in dApps, and to store locally than traditional bank account-based dollars. That’s why we think of it as an important step towards a more open financial system.
The consortium born out of this partnership is called CENTRE. The press release explains that each USDC is backed by a US Dollar, thus having a constant value of 1 USD for each USDC in circulation. The token was created as a result of joint development:
Each USDC is 100% collateralized by a corresponding USD held in accounts subject to regular public reporting of reserves. The underlying technology behind the USDC was developed collaboratively between Coinbase and Circle, in our capacity as partners and co-founders of the new CENTRE Consortium.
The USDC Token is available to Coinbase users. Currently, only customers residing in the United States can buy and sell this crypto. However, anyone with an ERC20 compatible wallet can send and receive the stable coin created by the CENTRE Consortium.
USDC will be available in Coinbase Pro in the coming weeks. CENTRE did not provide a specific date for such an event.