Stablecoins are a special kind of cryptocurrency. They differ from others by a fixed cost tied to the value of fiat currencies. In other words, these are the so-called stable tokens with a certain price and market value linked to some real asset.
Unlike regular crypto-currency coins, stablecoins are usually backed by fiat currencies that can be used for market trading. In addition, such coins are considered a reliable store of value during an unstable economic situation. Furthermore, they allow holders to use the advantages of tokenized currencies. These include privacy, security, transparency, and low fees. At the same time, stablecoins help alleviate the problem of volatility, which is relevant in the modern crypto market.
USDC is one of the most popular stablecoins today. Many choose it for investment, while others consider the USDT to BNB exchange more profitable. Read more about USDC in this article and find out if it is suitable for investment in the long term.
What Is USDC and What Are Its Features?
The USDC project was founded by a development team from Coinbase and Circle in 2018. USD Coin (USDC) belongs to the category of stablecoins and is a cryptocurrency pegged to another asset. USDC’s asset is the US dollar. 1 USDC maintains the value of 1 dollar. The coins are held in segregated accounts of financial institutions regulated by the US authorities. Independent accounting firms officially verify such accounts.
Unlike regular US dollars, USD Coin does not require a bank account. At the same time, the coins’ owner does not need to live in any particular country. As a result, it is possible to send USDC worldwide cheaply and in just a few minutes.
Features of the project:
- The token is created by users based on sending an equivalent amount of US dollars to the deposit. Information about this is recorded in the smart contract;
- USDC is great for settlements and payments. The coin is usually used to hedge risks as it is not volatile (like Bitcoin and altcoins) due to its nature;
- The coin is issued on several blockchains (Ethereum, Algorand, Solana, Tron, and Stellar). This allows users to choose a convenient option in terms of transaction speed and price;
- USD Coin is considered a transparent asset in cryptocurrencies since the emission process is fixed by a smart contract.
Advantages and Disadvantages of USD Coin
To understand whether it is profitable to invest in USDC or whether it is better to swap USDC to AVAX, you should be aware of all its advantages and disadvantages. The key benefits are:
- This cryptocurrency is not subject to volatility and has a stable exchange rate;
- Each coin is backed by $1 in the company’s account;
- The issuing company undergoes constant audits that confirm the presence of full fiat backing on the balance sheet;
- The coin is highly liquid and has a large capitalization;
- The token is multi-chain, and the user can choose the optimal one from several blockchains for use;
- The project’s developers are companies with a good reputation in the crypto sphere – Coinbase and Circle.
Among the disadvantages of the USDC stablecoin are the following:
- The coin is centralized and controlled by Circle;
- The price of the USD Coin is always stable, so it is not always interesting for traders as a tool for earning;
- Buying coins directly through the issuer is possible only after passing KYC.
Final Notes: Is USDC Good for Long-Term Investing?
All of the above indicates that USD Coin can be profitable for a long-term investment. Moreover, these tokens are very secure. Therefore, they can be used to pay for goods or services and for trading operations when you need to fix profits in dollars.
