What Is USD Coin (USDC) Used for?
Stablecoins have received lots of love and support from the crypto industry due to their efficiency in maintaining price stability. USD Coin (USDC) is one of the most popular stablecoins in the market.
Stablecoins have gotten a lot of love and support from the cryptocurrency industry because they keep prices stable. However, there are many stablecoins today, and they all operate differently. USD Coin (USDC) is one of the most popular stablecoins on the market.
If you are here, that means you have probably checked out other stablecoins too and now want to see what USDC offers before finally picking your favorite. Or, someone recommended USDC as a fantastic stablecoin, and you just want to learn about it before investing. Whatever the case, this article will help you understand what USDC is and its best use cases. Read on.
What Is USD Coin (USDC)?
USD Coin is a crypto asset that was released in 2018. It was made by Center, a group started by the crypto exchanges Coinbase and Circle. USD Coin is a fiat-backed stablecoin, meaning it’s pegged to a fiat currency, in this case, the US dollar. Therefore, one USDC is equivalent to $1. Unlike most cryptocurrencies, this one is non-volatile. So, its price never changes.
Check out this article to learn more about how USD Coin works.
What Is USD Coin Used for?
USD Coin is a great digital asset that many crypto investors use to accomplish different things online. Here are a few things you can do using your USDC coins:
Earn Passive Income
If you are new in the crypto space, you might not know about this, but it is actually possible to earn interest on your USDC coins. On some platforms, you can lend your digital assets and earn interest after a certain amount of time.
How this works is that the lending platform takes your crypto assets and loans them out to crypto borrowers. The borrower is then expected to pay back the loan within a certain amount of time and with a certain amount of interest.
For the borrower's assets to be as safe as possible, the lending platform makes them put up more collateral than they need to. This means the borrower must put up more cryptocollateral than the requested loan amount. This ensures that if there is crazy volatility in the crypto market, the lender can manage the risk and use the collateralized assets to repay you unless the borrower pays more collateral. Therefore, there is usually a low chance of losing your investments to loan defaulters.
Lending interest rates can vary depending on the platform you choose. For instance, Nexo offers a 12% interest rate for lending USDC on the platform. In comparison, Ledn offers around 8% for the same service. Therefore, you must do research to help find the best offer on the market. But keep in mind the terms of the loan so you don't fall into a trap while looking for the highest interest rates.
Receive Payments in USDC
Receiving payments in crypto is starting to become the new cool. If you've been paying attention, you've probably heard professional athletes demand to be paid in cryptocurrency. This is because doing so gives you more freedom over your money and lets you choose how much and where to store it.
Your business could also benefit from doing the same, especially if you perform many international transactions. If you were paid in USDC for your business, your transactions would be faster and safer. It would also make it easier to save money in crypto-interest accounts that would earn you more interest than a traditional bank account.
Crypto transactions are cheaper and faster than bank transfers, which normally take about three days. This can be very inconvenient, especially for customers from other countries who have to wait for their payment to be processed before their order can be sent out. USDC transactions are usually almost instant, rendering delayed payments a thing of the past.
Using USDC to make payments would also allow you to easily transfer funds to anyone without needing to use your bank account. That way, you enjoy greater reliability and privacy.
Access Crypto Services
If you are a crypto investor, you probably complete many crypto transactions daily. If you don’t have crypto in your wallet, this forces you to transfer fiat from your bank to your crypto wallet. Then use the fiat to buy crypto to access the services you want.
Clearly, this is a lengthy process. You can avoid this, though, if you use USDC, which is accepted on most crypto exchanges. You can easily access any crucial service without converting to other cryptocurrencies. Plus, even if you must convert, doing so from USDC would be much easier and faster than fiat currencies.
Also, moving money from the bank and then changing it to crypto would be expensive because it would involve a lot of transactions. Therefore, using USDC would save you lots of money in the long run.
USD Coin is the second-largest stablecoin today. It's also one of the most trusted stablecoins, in part because the people who make it say every month how many USDC coins are in circulation and how much cash they have on hand. So, if you are looking for a stablecoin that you can use to easily and securely perform online transactions, then USD Coin is a great choice.
However, since it is a crypto asset, it also involves some risks. So, it is important to do your research before you start using it. This will help you make a more informed decision on whether stablecoins are for you. Our detailed guide will help you learn more about the safety of using stablecoins like USD Coin (USDC).