In an early morning blog post, Coinbase announced that it was entering a strategic partnership with Circle. The two companies are coming together to form CENTRE Consortium. However, the biggest news is that Coinbase lists USD Coin (USDC) amid an influx of stablecoins, CNBC reports.
The CENTRE Consortium is a deliberate effort by the two companies “to establish more ground rules” in the nascent market. Interestingly, the cryptoverse is seeing a quick rise in the number of cryptocurrencies with a 1:1 parity with fiat currency.
More Trade Options as Coinbase Lists USDC
Dubbed stablecoins, these cryptocoins exhibit more stability than traditional coins like Bitcoin (BTC). CNBC explains that the stability is due to their peg to fiat currency. Normally, for a coin like USDC, its price will fluctuate in tandem with the US dollar. Therefore, it offers a more reliable option for cryptocurrency trades.
Circle’s USDC is just a less controversial version of Tether (USDT), another cryptocurrency pegged to the US dollar. Unsurprisingly, the digital currency remained unchanged in a substantial way during the period of major slump in the sector. Bitcoin slumped from the $20,000 USD high of December 2017 to hovering in the region of $6,500 USD for most of 2018.
Further, the blog post by Coinbase explains that only users in regions that allow the use of USDC will have access. The rest of the users can buy and sell USDC over all Coinbase platforms. However, Coinbase Pro users will have to wait longer. The crypto exchange revealed it will begin offering the coin on Coinbase Pro in the coming weeks.
Convenience and Utility
Particularly, as Coinbase lists USDC, it argues that stablecoins offer the best chance for “a more open financial system.” Further, the cryptocurrency exchange observes that the convenience of stablecoins could expedite the adoption of decentralized applications (dApps). Stablecoins are easier to program and users can send them quickly over dApps.
Specifically, Coinbase thinks that USD-backed stablecoins encourage a more open financial system since users can store them locally. Fiat dollars require traditional bank accounts in a controlled financial system.
Additionally, Coinbase notes that stablecoins dominate the digital payments platforms which facilitate e-commerce.
“Stablecoins like USDC are ideal for business purposes and e-commerce applications, as payments denominated in these tokens can be made at any time of day without the inherent risks of price volatility associated with using bitcoin and other cryptocurrencies as working capital,” Coinbase writes in the blog post.
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