Circle Internet Financial Ltd, a P2P Payments Company and the CENTRE stablecoin consortium unveiled “USD Coin” on 26th September 2018. According to reports, the service that will tokenize the US dollars. Tokenization will make it possible to use dollars as an alternative to public blockchains on the internet. The tokenized US dollars will be commonly known as USDC or USD//Coin.
The USD Coin service will be available for everyone. To avail, the benefits users just need to make a deposit of US dollars from their respective bank account and request conversion of those dollars into tokens to use them everywhere on the web. However, the conversion of the dollars into token will be subject to token’s compliance controls. The bank account holders upon conversion will be able to redeem USDC tokens and even cash them out to bank accounts.
Following the USDC launch, more than 20 companies have expressed their support for the tokenization of the USD. These companies have announced their plans to roll out support for USDC through various methods including the open ERC-20 standard. It is believed that the price-stable tokens have the potential to encourage promising new products, services, global financial contracts on the internet. Also, it is for the first time when CENTRE has come out with a service in collaboration with its member Circle.
The Circle was incepted by CENTRE somewhere five years ago. CENTER and other crypto community members predicted the strong future of fiat money and execution of financial contracts more powerful than the most favorable distributed public network infrastructure. Crypto and blockchain technology are envisioned to ease the way the internet is used. The role of crypto and blockchain is no less than that of HTTPS, SMTP, and SIP, which allow unrestricted information sharing. The crypto assets and blockchain, in fact, allow us to exchange value and even transact online securely, swiftly, globally, and of course at low rates.
Tokenization of fiat currency is believed to be the foundation to enable crypto assets and blockchain picks the greater role on the internet. For a crypto-powered global transaction to take place online, it is necessary to have a protective layer of fiat currency over the blockchains as well as within the smart contracts.
CENTRE’s open distributed approach
CENTER is an emerging consortium that focuses on streamlining fiat stablecoins by setting proper standards and policies. USDC is the first release by the consortium that has been developed on the concept of accountability and openness as well as technology standards set by CENTRE. CENTRE has set proper guidelines for the commercial use of USDC that includes-
- The user should carry a license to handle electronic money like trust charters and banking.
- The commercial usage of USDC will be eligible only upon auditing of AML and Compliance programs to meet the FATF standards
- A reserve of all the tokens with a copy of proof attested by the certified public auditors.
The commercial usage of USDC will be possible in the case of complete compliance with the regulations set by the CENTRE. As Circle is the first issuer of USDC it is expected that CENTRE will add more issuers for its USDC later as it plans to launch a broader membership framework by leveraging $20 million funds raised in a funding round in 2017.