Coinbase, in a partnership with Goldman Sachs-backed Circle, has announced the launch of a ‘digital dollar’ stablecoin called USDC.
“Starting today, Coinbase customers in supported jurisdictions can buy, sell, send and receive the USD Coin stablecoin (USDC) at Coinbase.com and in the Coinbase iOS and Android apps. US customers outside New York state can buy and sell, and customers around the world can send and receive. More geographies will be available in the future.“
This is the first time Coinbase has supported a stablecoin, which is fundamentally different from other cryptocurrencies. Unlike bitcoin or ether, a USDC is meant to represent a single US dollar (USD) that does not move up or down relative to its reference currency. One USDC is a 1:1 representation of a US dollar on the Ethereum blockchain.
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 launch follows months of rumors on whether the leading crypto stablecoin Tether (USDT) is truly backed 1:1 by the US dollar.
Last week, Tether suddenly dropped to $0.85 on the cryptocurrency exchange Kraken in an apparent sell-off.
Back in June, Tether hired a law firm to conduct a review of its assets. The firm reported that all Tether in circulation was fully backed by USD at the time. However, the review was not an official, independent audit and the law firm claimed a true audit “cannot be obtained.”
In response to mounting concern, the leading cryptocurrency exchange Binance has listed the stablecoin Paxos (PAX) as an alternative.