If you want to use your USDC to purchase other crypto coins like Litecoin or Dogecoin, you can make that happen on KuCoin. Experts say stablecoins often receive the highest returns because they maintain their expected value. Now enter the amount of dollars you want to convert to “USDC” and then click Convert. Put another way, Centre was set up to make a fiat token that provides liquidity and stability to the crypto world. Just because USDC might be perceived as a safer, more credible port to ride out the stablecoin storm than other coins, current economic conditions should be considered.
How To Buy USD Coin (USDC)
If one USDC is equal to one U.S. dollar, why is Coinbase offering such a generous 4% interest rate? By comparison, the typical savings account pays far https://forexbitcoin.info/ less than 1% per year on U.S. dollars. Let’s dive into the details of Coinbase’s USDC interest rate to determine just how „risk-free” it really is.
How to buy USDC on Coinbase Pro? No Fees!
USD Coin (USDC) is a stablecoin designed to keep a constant one-to-one value with the U.S. dollar. Stablecoins like USDC aren’t really seen as investments, instead offering liquidity for crypto traders looking to purchase other cryptocurrencies seamlessly on exchanges. In the fine print, Coinbase was clear that it is not a bank offering a U.S dollar savings account.
Do you wonder why there are no transaction fees on Coinbase / Coinbase Pro?
The crypto world is becoming more sophisticated, which opens the door to new financial products. Investors would do well not to take interest rate offerings for granted. A quick Google search, and you’ll see double-digit interest rates on stablecoins by unaccredited platforms.
The relationship between the U.S. dollar and volatile cryptocurrencies
While this stipulation may sound scary, it actually makes perfect sense. USDC may be tied to the U.S. dollar, but the U.S. government has nothing to do with USDC. Since USDC isn’t legal tender, it’s not going to be insured by the U.S. government. USD Coin holders can also earn additional vantage fx overview passive income through specialty online savings accounts designed exclusively for stablecoins. Once you’ve found the perfect exchange, you’re ready to buy USDC. While USDC’s backing has kept its value stable to date, it’s still a cryptocurrency and risks losing value.
And, of course, you can also use your USDC in the traditional sense to buy other cryptocurrencies. That recent move now means either one dollar or asset-equivalent backs every USDC. Similar to concerns made about Tether, USDC was flagged last year for not backing each USDC with an asset or dollar equivalent.
As Coinbase mentioned in its press release, it’s important to read the full terms and conditions to make sure platforms aren’t loaning your stablecoins to shady sources. You may be thinking that it’s rather ironic that a fiat currency like the U.S. dollar is playing such a critical role in the crypto economy. After all, this relationship goes against the passions articulated in the Bitcoin (BTC 0.32%) whitepaper. Reeling from the Great Recession, Bitcoin’s founders were specifically trying to replace the U.S. dollar and the financial institutions that served as third-party intermediaries. However, Bitcoin doesn’t need to replace fiat currency to be successful. In many ways, Bitcoin’s value will be more compelling if it can thrive in the existing financial framework.
- From the list of assets shown in a table locate “United States Dollar” and then click on “Convert to USDC”.
- You can earn appreciable interest on your USDC, substantially higher than the typical online savings account.
- In fact, it earns a top billing as the second biggest stablecoin after Tether, with more than $51 billion worth in circulation as of writing.
From the list of assets shown in a table locate “United States Dollar” and then click on “Convert to USDC”.
But crypto traders shouldn’t think of USDC as an investment, although it’s a coin with some advantages. USD Coin was launched in 2018 by Centre, a consortium founded by Circle and Coinbase. It was created to be a regulated stablecoin that “works within U.S. money transmission laws and regulations” while running on blockchain technology.
When buying USD Coin, factor in your financial goals and see if the risks make it the right buy for you. USDC investors generally use their holdings to earn passive income. You can lend USDC directly through its issuer, Circle, or with a hardware wallet like Ledger. Hi, can you help me figure out how I can simply hold a USDT balance to use against any future currency/crypto. This presents a challenge to investment planning, as well as to retirees who may depend on a stable return to supplement their income. Her thesis, and others like it, have nothing to do with Bitcoin replacing the U.S. dollar.