Hello steemians, I am back once more to continue on my homework task. This time I am writng on Stable coins part 2 by @yohan2on, with particular reference to Usd coin (USDC).

WHAT IS USD coin?

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USD coin is a digital stable coin that is pegged to the United States dollar which runs on the Ethereum blockchain. Each Usdc is backed by a dollar held in reserve. It was launched on September26, 2018 . It is an alternatiive to other usd backed currencies like Tether and TrueUSD.
The idea of introducing the dollars into blockchain makes for mobility of the currency all over the world and brings about the much needed stability needed in the cryptocurrency environment. This also created more opportunities for trading, lending and more.

USD Coin is developed by a Centre consortium, a partnership between Circle and Coinbase

How does USD coin work?

Each USDC token is backed with a single dollar and the process of turning US dollars into USDC tokens is called tokenization.

This tokenization is carried out in a 3 step process.

1. The user sends USD to the token issuers bank account.
2. The issuer uses USDC smart contract to create USDC equal to the amount of USD.
3. The minted USDC is delivered to the user while the dollar is held in a reserve.

It is also easy to redeem the dollars as it only needs the reversal of the above process.

To tokenize or redeem USDC with Circle, you need to register an account, verify the accou t; that is kyc, and link a valid bank account to it. Circle USDC does not charge any fees for tokenization or redemption, except on rejected bank transfers or incorrect information.

Advantages of USDC coin

1. USD coins creators are obligatee to provide full transparency and work with so many financial institutions in order to maintain full and complete reserve of its equivalent in fiat currency.
2. It brings stabiliity to other cryptocurrencies making the market more valuable.
3. This coin is more reliable than any other stable coin.
4. The authors of USDC are into sponsorships and partnerships with many good companies like Goldman sachs Group, Baidu, etc.
5. It is regulated and licenced.
6. It maintains substantial trading volume and is easily accessible across several major crypto currency exchanges.
7. Users can earn interests on their USDC balances directly on Coinbase.

Disadvantages of USDC

1. There is no accurate data on whether the developers can eliminate inherent problems in it as is also found in all stable coins.
2. Competition in the crypto market is very high, thus it must show that its adavantages surpasses others to take the top spot.
3. Since it is backed by the US dollar future price increase is uncertain.
4. Users and investors will be dragging their feet to use it, until they determine its behavior.
5. Another key problem with it is that, a persons account can be frozened by the central authority.

Conclusion

USDC has gained more and more acceptance and space with time. Even though, it had a dull beginning, it had gained notoriety. However, the institutional backing, liquidity, regulators link to bank accounts, makes the stable coin very popular. In the years to come, it is going to be one of the coins to be sought after.

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Thanks for going thru my homework task.
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