Centre, a joint venture of Coinbase and Circle, celebrated the milestone of $5.5 billion worth of transactions using their their USDC stablecoin, by issuing a “State of USDC” synopsis of the crypto’s life thus far.
Circle is a “crypto finance company” backed by Wall Street heavy hitters like Goldman Sachs, and owns the Poloniex exchange; and Coinbase is one of the oldest and most well known exchanges in the cryptoasset industry.
In an effort to “detail why USDC has grown so quickly and why it has become the preferred option for many across the crypto ecosystem,” Centre underlined support from major exchanges, as well as adoption from over-the-counter (OTC) trading desks - although Centre mentioned only Coinbase and Circle Trade by way of examples.
Centre took time in emphasizing their aspirations that USDC usage extend beyond its trading function, commenting:
In the long run, there is significant opportunity for the application of USDC in lending, commerce, global remittances, Internet-of-Things and usage within a broad range of financial contracts.
In addition, they emphasized USDC’s monthly audits to ensure that tokens are actually backed by dollars. USDC tokens are built onto the Ethereum blockchain as ERC-20 tokens.
When speaking of stablecoins, we must - for now - always benchmark observations to the still-reigning king of stablecoins: Tether (USDT). USDC has a long way to catch up in this regard, with an overall market capitalization of $261 million versus Tether’s $2 billion.
CryptoGlobe recently reported on another centralized stablecoin’s alleged denial of service, to some OTC desks. The Gemini Dollar (GUSD), centrally issued from the Bitlicense-approved Gemini exchange, has been variously accused of shutting down trading desks’ accounts after they tried to redeem GUSD tokens for dollars.
This sort of behavior, if true, demonstrates the dangers of dealing with centralized stablecoins, which are of course attached to centralized entities. These stablecoins, potentially in full control of their issues, are also not necessarily immutable.