USD Coin is a stablecoin that is pegged to the United States Dollar. Circle is the company behind USDC and it includes members from Coinbase and Bitmain. Circle claims that every USDC is backed by a dollar in reserve.
People can tokenize US dollars to USDC in three steps:
1. A user sends US dollars to the USDC issuer.
2. The issuer uses a USDC smart contract to create the equivalent amount in USDC.
3. The issuer sends the USDC to the user and keeps the US dollars in reserve.
Redeeming USDC follows the same steps but in reverse.
Grant Thornton attests Circle’s USDS reserves monthly. Because of this, investors consider USDC to be the safest USD-pegged stablecoin.
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