Stablecoins are a combination of the convenience of cryptocurrency and the stability of fiat. One of the most popular stablecoins is USD Coin (USDC). Its exchange rate to the dollar is 1:1, which makes it convenient to store funds and make transactions. Other advantages include system transparency, high stability, and the ability to conduct transactions through major blockchain networks.
We will take a closer look at what USDC is, how it differs from USDT, where you can pay for goods and services with USDC, and how to start accepting such payments on your company's website.
USDC: Overview and Features
The USDC token is a stablecoin — a cryptocurrency whose value is backed by fiat money or other physical assets (such as precious metals). USD Coin is backed by US dollars at a 1:1 ratio. The reserves that back the token undergo monthly audits: you can read the reports on the official website.
The token is open-source and managed by the Centre consortium. At the moment, it is the second by market capitalization after Tether. Among all cryptocurrencies, USD Coin ranks sixth. Its market capitalization is more than $26 billion.
One of the main features of USDC is its working principle. When buying the currency with fiat money, the company issues new tokens through a smart contract. When selling tokens, the former owner receives fiat, and the sold coins are irrevocably «burned». This principle of operation guarantees high stability of the exchange rate.
History of USD Coin Creation
USDC is issued and managed by the Centre consortium, which was founded by America's largest crypto exchange Coinbase and the company Circle. It was first announced in May 2018. Already in September 2018, the launch took place.
The token quickly gained popularity thanks to the support of the Coinbase exchange. In the 4th round of funding, the company managed to attract $110 million from companies such as Bitmain, Accel, Blockchain Capital, Breyer and others. Draw of investments continued in 2022: Circle entered into a $400 million funding agreement from BlackRock, Fidelity Management and Research, Marshall Wace, Fin Capital.
In March 2021, Visa announced that USDC will be available for transactions on its payment network.
In March 2023, there was a drop in the USDC exchange rate: its value fell to 87 cents. This happened due to the closure of Silicon Valley Bank, where a part of Circle's funds (about 8% of reserves) was kept, and the ensuing liquidity outflow. The USDC rate was later recovered and as of August 2023 is back at $1 with minor fluctuations.
USDC Features and Advantages
USDC has several advantages over other cryptocurrencies and stablecoins:
- Exchange rate stability. The token's exchange rate remains equal to the U.S. dollar. The only exception in the five years of its existence was a drop in value due to the closure of Silicon Valley Bank.
- Popularity. This is the second most widespread stablecoin, the market capitalization of which is inferior only to Tether.
- Transparency. Circle undergoes monthly audits, the reports of which are published. By this parameter, USD Coin surpasses USDT: Tether reserves are audited once every three months.
- Use of different networks. If initially USDC was released on the basis of Ethereum, the list of available blockchains now also includes Tron, Solana, Stellar, Algorand, Avalanche, Hedera and others.
In addition, payment in USDC has a number of pluses typical for any crypto transactions: high processing speed (including international payments), low commission, effective fraud protection, impossibility of chargebacks.
Among the features of USD Coin, it is important to consider its centralized nature. This can be a disadvantage for several reasons. First, funds on the wallet can be blocked on the company's initiative, which is impossible when using decentralized tokens. Secondly, the company is subject to American law and depends on the state's policy towards crypto-assets.
USDT vs. USDC: Differences
Both Tether (USDT) and USDC are stablecoins whose value is backed by US dollars. Both tokens can be used on most major blockchain networks (Tron, Algorand, Avalanche, Ethereum, and others). Despite the similarities between USDT and USDC, the difference between the two is important to consider when choosing a currency:
- Level of transparency and auditability. In addition to the frequency of audits (Tether Limited — quarterly, Circle — monthly), the location of the issuing companies differs. Tether Limited is registered in Hong Kong. Circle is subject to the legislation of the USA.
- Market capitalization and volume of daily transactions. In 2022, USDT became the most traded cryptocurrency: the volume of daily transactions in this currency exceeded even Bitcoin and Ethereum. Its market capitalization is also more than three times that of USDC (over $83 billion and over $26 billion as of August 2023, respectively).
Thus, USDC is a cryptocurrency characterized by greater reliability (particularly in terms of investment), but less turnover.
Which Companies Accept USD Coin
Although USDC token is less widespread than USDT, it is also actively used to pay for goods and services. Companies that have connected payment via USD Coin cryptocurrency include:
- Microsoft is a well-known software development corporation. Users can use the cryptocurrency to make purchases at Windows and XBox stores. USDC holders can pay for games, apps, movies and other products of the company with it.
- Twitch is an international streaming platform. Users have access to paid subscriptions, which are a form of support for streamers, as well as access to special icons in the chat and other additional features — including viewing streams without advertising. From 2020, it is possible to pay for such a subscription with cryptocurrency.
- ExpressVPN is a VPN service that provides encryption of user traffic, change of IP address and location, access to websites blocked in certain countries and a number of other features. The service is fee-based (from $8.32 per month). You can pay for access with USDC and other digital currencies.
- APMEX is an online store of precious metals (gold, silver, platinum, palladium). Here you can buy bullion and coins from various mints. Both bank card payment and crypto payments are available to buyers.
- Newegg is an online store of electronics, technology and software from various manufacturers. The assortment includes both computer systems, gadgets and game consoles, as well as accessories, devices for setting up a home network, etc. — up to office and home furniture.
How to Receive USDC Payments
There are three main ways to receive payments in cryptocurrency: direct transfers to the entrepreneur's account, development of a payment module for the company's website, or connection of a cryptocurrency gateway. Let's take a closer look at the advantages of each option.
Transfers to a wallet
Transferring digital currency to a cryptocurrency wallet is a simple method in terms of implementation, as it does not require any additional investments and does not involve technical difficulties.
Nevertheless, its use can lead to lower conversion rates and time losses: each payment in this case requires individual processing. The seller converts the order value into tokens, selects the network, calculates the commission, sends the buyer the USDC wallet address for payment, tracks and confirms the transaction.
Module development
Creating and connecting a payment module allows you to automate the checkout process and make it more convenient for the buyer, which increases conversion rates. Nevertheless, development requires investment of both time and finances, which can be disadvantageous for the company. In addition, mistakes made during development can lead to losses, for which the entrepreneur themselves will be responsible.
Use of crypto processing
Cryptocurrency payment service serves as an intermediary between the client and the seller. The system automatically calculates the amount in the currency chosen by the buyer, displays the address to which the payment should be made, tracks the transaction and confirms the order as soon as the processing by the blockchain network is completed. The customer makes the purchase through a convenient checkout, which increases sales conversion.
From an entrepreneur's point of view, cryptocurrency acquiring is convenient for several reasons: ease of connection, no additional investments in development, automation of transactions, the ability to track operations in a personal account and receive statistics. Many payment systems offer additional options — for example, conversion of cryptocurrencies in the personal account or withdrawal of funds to a bank card. The commission of such services, as a rule, is 0.5-2%.
Connecting Cryptocurrency Acquiring
Most services that perform crypto transaction processing services allow you to start accepting cryptocurrency payments in a minimum period of time. Let's consider the connection process on the example of the CryptoCloud crypto processing:
- Account registration. To use CryptoCloud, you will only need a valid e-mail address.
- Creating a project in the personal account. One user can create several projects for different websites. To create a project, you will need to fill out a short form with information about the company: name, description, type of activity, required cryptocurrencies.
- Specifying the necessary links. Links to the website, successful/unsuccessful payment pages, URL for notifications.
- Selecting the integration method. Ready-made CMS plugins (Opencart, Woocommerce, Drupal, GetCourse, Tilda, etc.), API, HTML modules are available.
- Integration testing — it is necessary to exclude errors of system operation.
When placing an order, the buyer will need to choose a currency from a list — the system will perform the conversion itself, calculate the blockchain network commission, display the address, QR code and network for payment. TRC20 and ERC20 networks are available for USDC transactions. Once the payment is made, the system will find the desired transaction in the blockchain network and confirm the successful payment.
USDC a Stable Cryptocurrency for Secure Transactions
USD Coin is the second most popular stablecoin, which is accepted for payment by such giants as Microsoft and Twitch. The token's stability is backed by USDC, and its reliability is confirmed by regular audits.
There are several ways to accept payments in tokens, but the most convenient option is a cryptocurrency payment system. An example of such a system is CryptoCloud, which works with individuals and legal entities, offers a commission from 0.4%, provides a convenient multi-lingual checkout and a number of useful features, including the analysis of statistics in the personal account. For more information on connecting and the service's features, please visit the official website and FAQ.
