24 October 2018
Coinbase, the San Francisco crypto exchange giant, unveiled the trading and launch of the first stablecoin on its platform — the USD coin digital token (USDC) at Money 20/20.
On the stage of Money 20/20 in Las Vegas, Coinbase COO and President Asiff Hirji announced that the company is issuing stablecoins backed with U.S dollar. The president revealed that one USDC token is backed up by a dollar and is fully audited and transparent — this is a key step towards the innovation of cryptocurrency.
Coinbase customers will now have the ability to purchase, receive, sell and send USDC tokens at Coinbase.com and the company’s Android and iOS apps. The U.S-based clients, except those located in New York, can buy and sell, while other customers from all over the globe can receive and send the coin.
The early adopters would have access to USDC on Coinbase Pro in a few weeks. The exchange’s wallet already supports the coin, and Coinbase expects it to be available in more jurisdictions in the future. This coin is reportedly 100% collateralized with USD (dollars) held in reserve accounts subject to public reporting.
Stable coins have been making their way to the news spotlights in the recent months. A stablecoin refers to a digital coin tied to a stable currency like the dollar, designed to minimize its price volatility. As a result, the value of the stablecoin is directly proportionate to the value of the collateralized fiat currency, usually held other financial entities regulated by the relevant authorities.
Earlier this month, the stablecoin Tether (USDT) found itself amid a lot of controversy after facing volatility issues, causing it to lose its strong link to the U.S dollar. During the time, USDT traded at $0.975, falling as low as $0.91 at one time. These problems came after rumors that cryptocurrency exchange Bitfinex, which stands behind Tether, was facing insolvency issues. Bitfinex.
The insolvency rumors came from a stream of articles on Medium and all over the internet, citing unverified reports of having difficulties while processing fiat withdrawals at Bitfinex. However, the company was quick to respond to the swathe of rumors, denying having banking or insolvency issues.
Following the rumors, crypto entrepreneur and investor Michael Novogratz reckoned that USDT should offer more transparency on its operations. The entrepreneur said that Tether fell short regarding establishing transparency while noting that the concept of stablecoins is highly sensible.