USD Coin, commonly known as USDC is currently the leading digital dollar stablecoin, with over $2.7bn of USDC in circulation as of today. A stablecoin is a digital currency that is pegged to the value of the US dollar, with its stability coming from 1:1 deposit reserves of the reference asset – so there is neither upward nor downward volatility risk like those present with cryptocurrencies. Currently, you can use a stablecoin to purchase goods and services, store value, deposit at a financial institution to earn interest, and more.
Why Have a Stablecoin?
Stablecoins are useful in that they provide the access to the myriad advantages of digital currencies, yet possess the relative price stability of fiat currencies. Price stability is important in economy which relies on the monetary unit being a “unit of account” by which goods and services are valued, priced and sold. Importantly, stablecoins are proving to play a pivotal role in the transition away from fiat toward the broad adoption of digital currencies.
Earn Meaningful Interest
Beyond their superior technical merit, decentralized freedom-enabling qualities, and non-reliance on central banking, you can earn meaningful passive income with stablecoins!
Somewhat recently, consumer investment markets are emerging for stablecoins and cryptocurrencies alike.
Holders of USDC, bitcoin, and other cryptocurrencies can deposit their digital assets with digital currency focused financial institutions, several of whom are currently paying competitive interest rates of 6% to 10% APR.
A broad emerging industry of legitimate, hybrid fiat-cryptocurrency financial institutions is making this possible. Specifically, most of these institutions are lending platforms who accept mainstream cryptocurrency deposits (such as bitcoin, litecoin, ethereum, etc) and lend up to 50% loan-to-value for fiat or stablecoin proceeds wired or transferred directly to the borrower.
Some of our favorite institutions currently offering high yields include:
- BlockFi. “Use cryptocurrency to earn interest at up to 8.6% APY.” Terms of Service and corporate legal statement.
- NEXO. “Earn 10% compounding interest, paid out daily.” Terms of Service and corporate legal statement.
- Abra. “Now earn up to 10% interest on USD stablecoins or crypto.” Terms of Service and corporate legal statement.
Importantly, note that LUXOLO Financial is neither a financial advisor nor is offering financial advice by identifying these publicly available investment options.
Where Can I get USDC?
You can exchange into USDC at any mainstream cryptocurrency exchange, including LUXOLO Financial. You store USDC either on a digital wallet or directly under the custody of a financial institution such as those listed above.
About USDC and Centre
USDC is issued by regulated financial institutions- including Circle Financial, Coinbase, and others- and is backed by fully reserved assets, and redeemable on a 1:1 basis for US dollars. USDC is governed by Centre, a membership-based consortium that sets technical, policy and financial standards for stablecoins.