Circle, the international crypto finance company, has launched their USD//Coin (USDC), a stablecoin pegged to the US dollar. According to a blog post published on September 26th, the stablecoin is being offered through the “open source consortium” CENTRE.
More than 20 companies have agreed to support USDC, starting from today. Some of these include Huobi, OKCoin, KuCoin and Coinbase. In an interview with Bloomberg, Jeremy Allaire, CEO and co-founder of Circle, said, “Market infrastructure like stable coins will become the base layer that supports every financial application. It has to be legitimate, trustworthy, built on open standards. We are solving a lot of these fundamental problems that exist.”
According to Allaire, this approach is what differentiates Tether from USDC. Although CENTRE is Circle’s subsidiary, the company is expected to become an independent organization in the near future. CENTRE will ensure that USDC issuers attain government licenses, banking partners and certified auditors in order to “attest that their reserves match tokens issued”.
While Circle believes that stablecoins are “foundational requirements for enabling powerful new global financial … services on the internet”, many analysts disagree with this concept.
Sam Doctor, Fundstrat’s managing director and head of data science research, said that he wouldn’t keep his money in stablecoins. He added that there is a “big disconnect between the concept and the implementation right now.”
Gil Luria, director of research at D.A. Davidson, explained that people who invest in stablecoins want to reap the benefits of cryptocoins as well as the stability provided by government-issued tokens.
Earlier this month, the Winklevoss Twins also launched an Ethereum token backed by the US dollar. The Gemini Dollar (GUSD), built on a network of trust, is currently available on BitBox, HitBTC and The Rock Trading. With the US dollars being stored in a US bank, Gemini promises to allow public accounting firms to examine deposits every month.