Circle and USDC: The Most Bullish Names in the Stablecoin Game

Circle and USDC: The Most Bullish Names in the Stablecoin Game

Circle – the developers of the USDC stablecoin – recently released a statement, outlining their plans to become a national digital currency bank. If approved, Circle would become the first national digital currency bank in history. In this article we will be discussing The USDC stablecoin as well as Circle’s plan to become a national digital currency bank.

USDC

USDC, or USD Coin is the worlds leading digital dollar stablecoin. USDC is issued and regulated by financial institutions and backed by fully reserved assets. USDC tokens are redeemable on a 1:1 basis for US dollars and is governed by the membership-based consortium, Centre. Centre sets the technological, financial and policy standards for stablecoins.

USDC has quickly grown to be the largest stablecoin industry ecosystem in the world. USDC is supported by hundreds of companies, products, and services, which include digital wallets, exchanges, DeFi protocols, as well as savings and lending payment services. Circle created the USDC stablecoin as a business-centric payment solution, aimed at improving upon the world’s currently fractured banking systems. Unlike the electronic USD, the Tokenized, backed USD Coin is far more scalable and efficient for global use cases than what was previously achieved via traditional banking tramlines.

USDC is available as Ethereum ERC-20, Algorand ASA, Solana SPL, and TRON TRC-20 tokens. Users can integrate the USDC token smart contract with any Ethereum, Algorand, Solana and TRON applications. There are currently 26.9 billion USDC stablecoins in circulation.

Centre

Centre was founded by both Circle and Coinbase and aims to facilitate an easier means of exchange value between people, businesses, and financial institutions. Centre believes that removing artificial economic borders will lead to a more inclusive global economy. Centre is a decentralized and independent entity. The consortium’s software implementation is managed by an organization created for the soul purpose of providing support, governance, and continuous research and development for the project.

USDC Backing

With the support of Centre and Coinbase, Circle holds the USDC reserve entirely in cash and short duration US treasuries. Contrary to common belief, USD stablecoins are only partially backed with cash. The remainder of the backing for USD stablecoins is the equivalent value of a 1:1 cash-backed ratio; however, that value is held in a combination of assets which can be exchanged for cash, rather than being held in USD cash itself. This USD cash backing, alongside the cash equivalent, investment grade assets of USDC – combined with Circle’s one hundred percent transparency – is the reason that USDC is the world’s best-performing stablecoin.

Circle’s Goal: Becoming a National Digital Currency Bank

In a recent Circle company update, Circle’s CEO Jeremy Allaire spoke on the company’s plans to become a national digital currency bank. Circle is working meticulously alongside financial branches of the US government, to ensure every regulatory box is checked throughout this difficult and lengthy process.

“Circle intends to become a full-reserve national commercial bank, operating under the supervision and risk management requirements of the Federal Reserve, U.S. Treasury, OCC, and the FDIC.” States Circle CEO, Jeremy Allaire. “We believe that full-reserve banking, built on digital currency technology, can lead to not just a radically more efficient, but also a safer, more resilient financial system.”

Allaire believes that his company’s goal is quite achievable. Saying as Circle has always exceeded the US bank-grade Basel III requirements, regarding high quality liquid assets and liquidity coverage ratios (HQLAs and LCRs). Within the next few years, it is likely that we will see Circle become the first National Digital Currency Bank.

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