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A USD Coin (USDC) is a stablecoin tied to the value of one U.S. dollar. Unlike the fiat currency, USCD is not issued or backed by the United States Government. Rather, it is an open-source project designed to achieve higher levels of stability when compared to some of the more well-known cryptocurrencies. As an alt-coin, USDC is highly cross-compatible with a number of different blockchains:
- Ethereum
- Avalanche
- Algorand
- Solana
- TRON
- Stellar
This means that a wide number of projects built on these networks can accept USDC as a currency, providing it with more utility. Unlike other stablecoins, USDC tokens are fiat-collateralized. This means that for each USDC token that is issued, the exact same number of US dollars must be reserved as collateral. When a USDC token is sold for fiat currency, the USDC token is burned (removed from circulation).
Investors often utilize stablecoins such as USDC as a way to hedge against the volatility of some of their other investments in both cryptocurrencies and traditional financial assets. The token is also being used by some international investors as a way to get exposure to the U.S. dollar.
Who Owns USDC?
Because of its structure as a stablecoin, the USDC network needs to hold large amounts of U.S. dollars in reserve. This is accomplished by holding this money in several segregated accounts across a number of regulated financial institutions and banks. The accounting firm Grant Thornton LLP oversees these accounts and provides Reserve Attestation Reports listing the current tokens issue as well as the current amount of US dollars held in reserve.
However, Grant Thornton does not manage and oversee USD Coin. Rather, the coin is managed by CENTRE, a joint venture between Coinbase and Circle. Coinbase is a well-known cryptocurrency exchange, while Circle is a financial technology firm. Circle is the private company that issues USDC. This means that USDC is a centralized cryptocurrency, unlike Bitcoin and Ethereum. In June, Circle announced that there were 55 billion USDC in circulation.
Can you stake USDC?
Many investors are interested in finding a USDC staking overview. Although USDC is not a proof-of-stake cryptocurrency and can’t be staked, it is possible to earn interest. This is generally done through a third-party platform that enables you to create a compound-interest savings account.
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Your deposit is then locked up for a specific period that you have set. During this period, you can collect your earnings, and at the end of the period, you can opt to re-invest your earnings or withdraw the principal.
Is USDC Safe?
Trust is a key issue in the crypto space. Especially in light of the current economic difficulties facing many, investors are more concerned than ever before about security. Because of the stability of USDC, stablecoin saving accounts and investing are fairly low risk. However, all investments are associated with risks, and returns cannot be guaranteed.
Despite the formal sounding name, users must remember that USD coin is not actually backed by, or issued by, the United States Federal Government. This means that they do not have any FDIC or SIPC insurance protecting their reserves. However, Circle is regulated as a licensed money transmitter. This means that U.S. law applies the same stringent standards to Circle as to more well-known brands such as PayPal, Stripe, and Apple Pay. Furthermore, Circle’s financial statements are audited annually and subject to review by the SEC. These factors make USDC a relatively safe investment opportunity.
How to earn interest on USDC
Fundamentally, staking simply means locking up your assets for a period of time to keep the blockchain network secure while earning interest as a reward. But you can’t stake USDC, so you need to look alternatives like automated crypto trading. There are a number of providers that offer this kind of service.
Many interest accounts are based on crypto lending, where your crypto deposits are loaned out to borrowers, and you can earn interest on those loans. However, it’s very risky, and the interest rates for crypto loans have been falling, causing many investors to turn elsewhere.
Furthermore, the best alternative to USDC staking is strategic investments and automated crypto trading. The platforms invest your deposits in a risk-averse manner so as to provide you with higher, long-term returns. Haru Invest is a platform you can check for this manner.
Is holding USDC worth it?
The answer is yes; it can be. Many platforms continue to offer highly competitive rates of return for USDC. These USDC coin interest rates range from 3% all the way to 10%. This demonstrates just how profitable stablecoins can be.
Furthermore, Haru Invest’s Earn Plus product offers very good earning rate for USDC holders.
USDC Interest Rates
How much you can earn on USDC depends primarily on the platform you choose to work with and the products you choose to invest in. At Haru Invest, We deploy three core algorithmic trading strategies to drive profits for investors:
- Arbitrage Trading that leverages the price gap between crypto exchanges
- Market Neutral Strategy based on the price stability mechanisms at crypto futures exchanges
- Spread Trading focuses on the volatility of BTC/ETH futures contracts
Haru Invest has paid out 4.1M+ separate earnings on time.
Our total transaction volume since launch exceeds $2.11B. We have more than 74,500 members from 140+ countries using Haru Invest. 87.5% of our members continue to use our platform with deposits.
Is it better to use USDC or USDT?
USDT is currently used on a more frequent basis for trading and payments. This greater utility means greater value stability over USDC and potentially higher returns on your investments.
However, USDC is generally considered safer because of Circle’s efforts to build trust through frequent reports, audits, and compliance with all relevant regulations. Thus, the question of whether it is better to use USDC or USDT is best answered by saying, “it depends.” Depending on your goals and risk appetite, you might choose to invest in one currency over another or potentially invest in both, achieving greater diversification.
Earn Interest on Stablecoin with Haru Invest
Haru Invest provides multiple financial products that allow you to earn interest on stablecoins such as USDC and USDT. If you would like to invest, feel free to start exploring our product offerings.
