September 26thth, Circle has announced the release of its new stablecoin USD Coin (USDC), which will immediately begin trading on the exchange of Circle & # 39; s Poloniex. The new stablecoin of the USD will be fully guaranteed by USD in a 1: 1 ratio. The stablecoin market has been particularly active recently, with several other projects launched in recent months.
The announcement of Circle also points out that the company has over thirty support companies lined up to start offering trading and support for the new stablecoin.
Exchanges that have agreed to start trading in the new stablecoin. In addition to Poloniex, other exchanges include OKCoin, KuCoin, Digifinex, Coinplug, XDAEX and CoinEx. In addition, a number of major portfolio suppliers have pledged to shortly support the USDC.
– Circle (@circlepay) September 26, 2018
Circle's Stablecoin project began about four months ago when Circle announced it had raised a $ 110 million loan, partly to finance the development and launch of its new stablecoin.
Circle is supported in particular by Goldman Sachs and its successful financing was led by Bitmain Technologies, the Chinese mining giant.
Goldman's support and the massive fund-raising round gave considerable importance to the project. Circle acquired Poloniex at the start of this year, for around $ 400 million.
Convertibility and ease of use
Traders can easily convert USD to USDC using the Circle conversion platform. The funds are held with Circle's banking partners. USDC coins follow the ERC-20 standard, and while there will be no USD tokenisation fees, there will be a 0.1% commission when the USDC is converted to fiat. By building USDC using the ERC-20 standard, Circle has made it relatively easy for exchanges and wallet suppliers to add support for the new currency.
To ensure that USDC maintains its 1: 1 anchor, Circle has led the creation of CENTER, a consortium with several other market participants designed to monitor and regulate USDC issuance. USDC issuers must comply with the rules of the consortium, including the sending of verified bank statements proving that issuers have enough USD on deposit to maintain the 1: 1 ratio.
The Stablecoin field increasingly crowded
In recent months there has been a huge amount of activity in the stablecoin market. The launch of the new stablecoin of Circle follows the news of the approval of the launch of the stablecoin of Gemini and Paxo by the New York Department of Financial Services (NYDFS). Two start-ups, Havven and Carbon, have also recently launched their own stablecoins.
The Stablecoin have emerged as a key part of the cryptographic market infrastructure, allowing traders to easily move in and out of positions without triggering a capital gains tax. Stablecoins also provide utility by offering traders and traders an easy means of exchange that avoids interacting with the traditional financial system.
The dominant stablecoin to date has been Tether (USDT), which has been persecuted by persistent concerns about the validity of its peg 1: 1. Tether is considered by some to be a systemic risk to the growing crypto markets, with widespread concerns over 39. Impact that regulatory action against Tether could have on the wider market.
Concerns that Tether truly holds a $ 1 deposit for each USDT issued were triggered by its decision at the start of 2018 to terminate its relationship with its auditor at the start of 2018, always a flag red for suspected mal government. According to Coinmarketcap, over USD 2.8 billion has been issued since September 26th.
In an effort to allay Tether's solvency market concerns, Tether released a report from the Washington D.C. Freeh, Sporkin & Sullivan LLP attesting the solvency of the company, but in the end the report raised more questions than answers.
The market will follow closely the speed with which the USDC is adopted. The question of which stablecoin will eventually dominate is all but settled, and the stablecoin space promises to remain interesting for the foreseeable future.
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