We’re launching support for a new stable coin called USD coin. We call it a stable coin because one USD coin can reliably and stably be exchanged for exactly one US dollar. A stable coin is a cryptocurrency that is created for the purpose of having a stable value. You can think of it as a digital programmable dollar.
One of the biggest blockers to owning and using crypto today is that the prices are fluctuating so much, we don’t know what the price might be tomorrow. With a USDC stable coin, if I want to give 20 dollars or 20 USDC to my friend, I know that that value will 20 dollars tomorrow.
So the benefits of a stable coin are that it merges the benefits of the dollar, which is the current global reserve currency, with the benefits of the blockchain which means 24/7 access, fast transfers, programmability, and the ability to send both macro and micropayments. We’re taking an ecosystem-first approach. We are a founding member of a groundbreaking consortium with Circle. We’re really excited.
There are different ways to keep a stable coin stable in price. We choose the simplest approach, which is simply to keep a single US dollar on reserve and on hand for USD coin that’s outstanding.
The whole point of what we’re doing is to bring us more into this utility phase where crypto can be useful on a daily basis. This gets us closer to a more open financial system because moving money around today can be surprisingly hard, especially when you’re building new financial products and apps.
We think that a stable coin can be to the financial system, what the iPhone was to mobile. Namely, an innovation that makes an entire system more programmable and hence, more useful. This is just the tip of the iceberg, honestly.
These are just the things we can think about, right in the near future. The reality is, is that we have no idea how stable coins are going to be used in the next five to ten years. And that’s actually what totally excites us. (relaxing electronic music).
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