Circle Hails USD Coin, Joining the Growing Stablecoin Stable
P2P payments company Circle has followed up on its own stablecoin plans in officially introducing its USD Coin token system in collaboration with the CENTRE stablecoin consortium. Once enrolled, users and enterprises can cash dollars into USDC tokens via their bank accounts and vice versa.
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Bridge ‘Usable Everywhere the Internet Reaches’
On September 26th, Circle and CENTRE formally introduced their USD Coin, a stablecoin that will allow users to have a tokenized bridge between their bank accounts and the cryptoverse.
— Circle (@circlepay) September 26, 2018
In today’s announcement, Circle co-founder and president Sean Neville and co-founder and CEO Jeremy Allaire characterized USD Coin in the manner of a conversion service:
“Individuals and institutions can enroll in this service to deposit US dollars from bank accounts, convert those dollars into tokens usable everywhere the internet reaches (subject to the token’s compliance controls), and redeem USDC tokens and cash out to bank accounts.”
The announcement comes on the heels of Gemini exchange receiving regulatory greenlight for its own Gemini Dollar in earlier this month and after Circle publicly opened up about USD Coin back in May 2018. Now two of America’s top cryptocurrency enterprises will have native stablecoins, begging the question of whether other domestic competitors will tread similarly.
“Our view is that all fiat currency will be crypto,” Allaire said in May. “It seems inevitable at this point.”
During those same comments, Allaire suggested work on euro and pound versions of USD Coin would begin once USDC was finalized, indicating these stablecoins are now nigh.
CENTRE Supplies the Base Layer
Circle participated in forming CENTRE, an open-source stablecoin consortium, though the platform has since pivoted toward independence in its mission to provide a new compliance-minded “base layer” for commercial “openness and interoperability.”
CENTRE is focused on minting, scaling, and governing on its network, of which Circle is the first licensed member and USDC issuer. Per the project’s whitepaper, the consortium is based around creating:
A mechanism for issuing members to mint and burn/redeem asset-backed fiat tokens, or ‘stablecoins,’ to address price volatility …
Protocols to enable global stablecoin transaction interoperability on public blockchains using state channels for increased throughput and scalability …
Network membership rules and smart contracts to govern, audit, and manage the licensed network participants that mint, transact, and redeem stablecoins.
As for these membership rules, in their new announcement Neville and Allaire said prospective USDC issuers are mandated to:
Be licensed to handle electronic money, such as banking, money transmission or trust charters
Have audited AML and Compliance programs that meet FATF standards
Back all tokens on a fully reserved basis and provide monthly published proof of reserves attested to by certified public auditors
Support fungible exchange and redemption of USDC tokens from other authorized issuer members
Meet other reporting and review requirements established by CENTRE
Another Challenger Enters the Field
2018 has seen the field of stablecoins increasingly saturated. What remains to be seen is whether friction will stay low and the many can coexist simultaneously or if one or a few will eventually win out in the survival of the stablest.
Call it hyperdigitalization, or stablecoin balkanization, or whatever you want. But the battle royale for new users looks on. Gemini is going its own route, as is Circle. Venture capitalist heavyweights a16z just bet big on MakerDAO. Binance is backing Terra.
Then there’s Tether, TrueUSD, Kowala, and more. What’s clear is that users looking to avoid value fluctuations in crypto have no shortage of options to turn to now.
Will the more centralized options or their decentralized peers win come to seize the day? There’s no telling presently, but It’ll be a thread to keep an eye on in the years ahead.
What’s your take? Is USD Coin entering a market too saturated with stablecoins? Why or why not? Let us know in the comments section below.
Images via Pixabay