Circle and the CENTRE open source consortium today introduced a service to tokenize US dollars, called USD//Coin (USDC), with unparalleled support from more than 30 partners across the industry, including exchanges, protocols, platforms, applications and wallets. These partners will play an essential role in forming a broad and inclusive ecosystem around USDC, effectively pushing forward an open standards model for fiat money on the internet that has potential to bring about significant innovation in financial infrastructure. USDC is being launched by CENTRE while Circle is the first commercial issuer of USDC.
The major application for fiat stablecoins over the last 18 months has been as a mechanism for trading and hedging in global crypto capital markets. Investors and traders need seamless on and off-ramps for fiat currency into the exchange ecosystem, and need to be able to hedge in and out of volatile crypto assets, as well as move stable value across exchange venues to seek arbitrage and liquidity opportunities. Exchanges where USDC will be listed for trading soon include DigiFinex, CoinEx, Poloniex, KuCoin, OKCoin, Coinplug and XDAEX, thus allowing millions of retail and institutional investors around the world to use a transparent, price-stable cryptocurrency to trade against hundreds of different crypto assets.
Clearly stablecoins have found product-market fit in the crypto trading space, but very often we hear industry players point out that there is no obvious stablecoin solution they could choose to incorporate into their own projects. These are broad use cases that have potential to revolutionize the global economy. As developers all over the world build creative protocols, platforms and applications on top of blockchain and smart contracts infrastructure (particularly around the Ethereum ecosystem), they often need a digital, tokenized paradigm for fiat money that they can reuse for their solutions. As with other technology components, the stablecoin of choice has to be open, interoperable, safe, transparent and trustworthy. USDC was designed by CENTRE to effectively become a solution that anyone can use and contribute to.
At the protocol level, it is worth mentioning two examples of how USDC can be leveraged. Trading protocols are extremely relevant, as exchanging currency, goods or assets in a trustless way is a capability many products will soon want to possess natively. One of the leading projects in the space is the Kyber Network. It is exciting to see USDC listed on such a protocol and the trading experiences that developers will implement around it soon. Similarly, USDC will soon be available for trading on innovative decentralized trading platforms such as IDEX, Paradex, RadarRelay and Tokenlon.
“Stablecoins, especially ones that provide fiat rails, are a critical piece of infrastructure in the decentralized ecosystem. We're excited by Circle and CENTRE’s efforts to create a transparent, fiat-backed project that provides a bridge between traditional finance and the open financial system of the future.” -Ron Bernstein, Paradex General Manager
“At Dharma, we are excited about the lending use-cases enabled by USDC’s fast and trustworthy stablecoin-to-fiat conversion.” -Brendan Forster, Head of Growth Ops, Dharma
Lending protocols are also very promising as they allow basic debt primitives to be programmed into a myriad of applications. The team at Dharma are doing a fantastic job on that front and it will be great to follow how USDC is incorporated, allowing debt experiences to be built across many different products.
“In the next 12 months, cryptocurrencies will finally start getting mainstream adoption as decentralized applications like Origin-powered marketplaces start competing head-on with traditional web and mobile applications. Stablecoins like USDC will be absolutely essential in enabling everyday buyers and sellers to easily and instantly transact with each other across homesharing, ridesharing, contractor services, and many other categories without currency volatility risk. Origin is thrilled to partner with Circle to provide a reliable medium of exchange cryptocurrency on our platform and our partner applications as we aim to reduce transaction fees, promote free and open commerce, and redistribute value from corporate monopolies back to individual buyers and sellers." -Matt Liu, Origin Protocol Co-founder
“We're excited to support Circle's efforts with USDC and integrate USDC with BlockFi's lending platform. Having access to 24/7, digital USD from a trusted source will enable us to streamline operations and offer a more flexible client experience.” -Zac Prince, Founder and CEO, BlockFi
“BitPay has always been supportive of open source crypto communities and blockchain initiatives and likes the direction CENTRE is taking with USDC. We envision a future where all digital assets and payments live on the blockchain.” -Stephen Pair, CEO of BitPay
"FOTA recognizes the importance of stablecoins in the maturation of digital asset derivative market. Stablecoin plays an essential role on FOTA as it is used in pricing, quoting, settlement and margining, making the entire system measure-complete, a prerequisite for our state-of-the-art margining system STAMP (System for Theoretical Analysis and Margining Portfolio). We believe USDC will provide more possibilities to this market and boost adoption of a new global economy." -Brian Cai, CEO & Founder at FOTA
Melonport is building an intriguing, smart contracts-based low-cost alternative to current investment fund management solutions. We share the vision that in the long term all assets will eventually be tokenized, and USDC should help them in that direction by allowing on-chain investment funds to be denominated in a price-stable cryptocurrency. Centrifuge is building an open, decentralized operating system to connect the global financial supply chain, and as they imagine invoice financing happening on top of non-fungible tokens and a stablecoin solution, USDC should deliver on that need.
“For the participants of the financial supply chain, corporates, and SMEs, to adopt Centrifuge OS, a stable and reliable way of getting paid is crucial and necessary. We believe that CENTRE's stable coin standard is an excellent means to achieve that. Issuing USDC, Circle would not only enable cross-border and cross-currency payments but would also bridge the on- and off-chain world of payments. For business adoption at scale, crypto payments need to become as simple as that.” -Maex Ament, CEO and Co-Founder at Centrifuge
“USDC is one step to realizing Melon’s long-held vision that all assets will eventually be tokenized. One of the big challenges blockchain operated and regulated investment funds face is the lack of a liquid, stable ERC-20 token. USDC by CENTRE compliments the Melon protocol in this regard allowing on-chain investment funds to be denominated in a currency which provides a safe haven for managers and investors.” -Mona El Isa, Melonport AG CEO & Co-founder
At the CENTRE consortium level, there is a commitment to ensuring USDC is used in a safe manner. Therefore leading blockchain AML, forensics and risk management firms such as Chainalysis, Elliptic, Coinfirm and Coral are enthusiastic about working with CENTRE and its issuers to provide support for USDC.
Finally, at the top of the stack customers need to be able to safely store USDC, and share with others or use it to interact with the various services described earlier. We are happy to see custodian, software and hardware wallet products such as BitGo, Cobo, Coinbase Wallet, CoolWallet S, Elph, imToken, Ledger, Status, Trust (and soon many others) providing native support for USDC.
“Stablecoins will form a cornerstone of the decentralized web and help bring cryptocurrencies to millions of users, moving us another step closer to an open financial system. Starting today, Coinbase Wallet will support the storage of USD Coin (USDC), as well as the use of USDC in decentralized apps.” -Sid Coelho-Prabhu, Coinbase Wallet Product Lead
There are many other use cases where USDC has the potential to be extremely useful, from all sorts of payments and commerce (P2P payments, merchant payments, B2B payments, cross border payments, consuming virtual goods and other non-fungible tokens, Internet-of-Things payments), to further applications within financial contracts such as derivatives contracts, insurance contracts and security tokens. It is thrilling to reflect on the ecosystem that is already formed around USDC as it is introduced today and ponder what can be achieved from here.
If you are a developer or a solution provider interested in integrating USDC into your project, find more resources on centre.io. You can also read more about USDC and follow how the ecosystem evolves here.