When combined with the improvements in blockchain technology, the wealth of untapped potential and use cases is clear for USDC. These opportunities are particularly relevant for countries where residents could benefit greatly from the utility USDC affords over traditional fiat currencies. For example:
- Stable by design. The value of USDC fluctuates far less than other cryptocurrencies (only a fraction of a cent over the last 2 years). This is because its value is pegged to the U.S. dollar. The strength and stability of USDC’s peg to the U.S. dollar, backed by high-quality reserves and with transparent and regular attestations, makes it a safe-haven for users who want to remain active in the crypto market during a downturn, or period of high volatility.
- Accessibility. Stablecoins like USDC are a secure, cheaper, and much faster way for anyone to send value to another party. Transfers through the legacy banking system, which today can take multiple business days to settle, can be completed in under an hour with USDC, which runs upon blockchain technology instead and which saves users from the added intermediary costs associated with having to go through the traditional banking network.
- Access to DeFi. Coinbase and many others believe stablecoins such as USDC will play an increasingly significant role as the fiat on-ramp to the new web3 ecosystem. Improving the ease of fiat-to-crypto transactions will pave the way for even more users to access DeFi. By owning USDC, users can interact with innovative new dApps in areas like trading, insurance, saving, lending, and borrowing, where USDC is a trusted means of exchange.
Research shows that whilst uptake within the US has been strong, adoption of USDC elsewhere has been more conservative. Currently, 3x more USDC is bought with USD versus non-USD currencies.
This barrier in international adoption is due in no small part to users having to pay fees when converting their local currency into USDC. Realising that global parity was therefore necessary, Coinbase decided to waive all commission fees from late October 2022. It now makes no difference if customers buy or sell USDC via any fiat currency on Coinbase: from AUD to ZAR.
* This feature may not be available to all regions. No commission fees attributed to Coinbase will be charged until further notice. However, spread, and processing fees charged by third party processors, will continue to apply.
Cryptocurrency is not regulated by the UK Financial Conduct Authority and is not subject to protection under the UK Financial Services Compensation Scheme or within the scope of jurisdiction of the UK Financial Ombudsman Service. Investing in cryptocurrency comes with risk and cryptocurrency may gain in value, or lose some or all value. Capital gains tax may be applicable to profits from cryptocurrency sales. Content is for informational purposes and is not investment advice. Past performance is not indicative of future results. Investing in cryptocurrency comes with risk.
