|
Title: If USDC is backed by USD, how does the $ get into the circle bank account? Post by: DrBitcoin on December 07, 2019, 07:05:40 PM Perhaps this is a dumb question...but if I go onto Coinbase, or anywhere, and buy 1 USDC, how does the $1.00 USD I paid for it get into Cricles Bank account. Audits show that Circle has 1 USD for every USDC, I'm just confused as to how that USD actually makes it from my bank account, to Circle's bank account?
Does circle decide who the fiat onramps (like Coinbase) are? And they have to buy the USDC from Circle consortium dollar for dollar? Can someone enlighten me? Title: Re: If USDC is backed by USD, how does the $ get into the circle bank account? Post by: sorrros on December 07, 2019, 07:16:59 PM Look, it works that Coinbase emits limited amount of tokens, for example 1 billion tokens, for each token they have 1USD in a safe place, so they own 1 billion USD in their bank account. Now, you have to believe that they really own this amount of money in their bank account to pay 1USD for 1USDC token. :)
Title: Re: If USDC is backed by USD, how does the $ get into the circle bank account? Post by: Nadziratel on December 07, 2019, 07:54:54 PM One of the biggest problems of Stable coins is that they have equivalents in USD. Tether has been criticized for years for this reason. And I still don't believe that all stable coins have exactly the equivalent. Including USDC. I think there's a back door, and Coinbase uses it.
Title: Re: If USDC is backed by USD, how does the $ get into the circle bank account? Post by: DrBitcoin on December 07, 2019, 08:14:01 PM One of the biggest problems of Stable coins is that they have equivalents in USD. Tether has been criticized for years for this reason. And I still don't believe that all stable coins have exactly the equivalent. Including USDC. I think there's a back door, and Coinbase uses it. If you had a license to print money...wouldn't you? Title: Re: If USDC is backed by USD, how does the $ get into the circle bank account? Post by: Febo on December 07, 2019, 08:26:41 PM Perhaps this is a dumb question...but if I go onto Coinbase, or anywhere, and buy 1 USDC, how does the $1.00 USD I paid for it get into Cricles Bank account. Audits show that Circle has 1 USD for every USDC, I'm just confused as to how that USD actually makes it from my bank account, to Circle's bank account? Does circle decide who the fiat onramps (like Coinbase) are? And they have to buy the USDC from Circle consortium dollar for dollar? Can someone enlighten me? When Coinbase credit you with USDC they send your USD to Circle. There is no other way that this. They probably have some USDC on loan from circle to do this fast. When you sell them USDC and get Bitcoins or USD, they simply send those USDC to Circle and get USD for it. Title: Re: If USDC is backed by USD, how does the $ get into the circle bank account? Post by: carlzec on December 07, 2019, 10:12:41 PM In the meantime, I think it would be reasonable to choose an Exchange that trades with USD instead of USDC or USDT. There have been many hacking events in the market recently. It is very important to keep deposits safe.
Title: Re: If USDC is backed by USD, how does the $ get into the circle bank account? Post by: JeffBrad12 on December 07, 2019, 10:42:02 PM They are having total supply with equivalent of their reserved fund and when you are buying the USDC your money doesn't right away sent to the circle bank account but instead you're basically buying their money and when you are buying it the supply will not change. Although, I honestly doubtful about whether the amount of reserved fund match with the stablecoin total supply they printed but people still using it right?.
Title: Re: If USDC is backed by USD, how does the $ get into the circle bank account? Post by: boris singer on December 07, 2019, 11:10:11 PM They are having total supply with equivalent of their reserved fund and when you are buying the USDC your money doesn't right away sent to the circle bank account but instead you're basically buying their money and when you are buying it the supply will not change. Although, I honestly doubtful about whether the amount of reserved fund match with the stablecoin total supply they printed but people still using it right?. as I understand it, the circle will indeed process as a responsible third party. So users buy from the consortium as an accommodator. the total supply issued and circulated is always audited with an amount almost equal to what is reserved. I also saw the results of the October 2019 usdc report: https://www.centre.io/pdfs/attestation/grant-thornton_circle_usdc_reserves_20191114.pdf Title: Re: If USDC is backed by USD, how does the $ get into the circle bank account? Post by: Tipstar on December 07, 2019, 11:30:12 PM In the meantime, I think it would be reasonable to choose an Exchange that trades with USD instead of USDC or USDT. There have been many hacking events in the market recently. It is very important to keep deposits safe. And what is USD. It would be a hassle to cashout and cashin everytime you want to make a trade and the fees too would be enormous on doing so. Stablecoins are a safe tool for traders, we just need more safety confirmation and less rumors about such coins. |