In a bombshell announcement, Circle revealed USD Coin[1], a fiat backed stable coin[2] that will be used on their Poloniex exchange.
The move comes as Circle continues to pivot its business models. In recent months they have launched Circle Invest, purchased Poloniex, and redesigned Circle Pay. Now they are launching not only USD Coin, but have announced Centre, what they hope will become a group of companies designed to facilitate the creation of other fiat backed stable coins. Bitmain joined them on stage to announce that they are a part of that group. The group’s main purpose will be to impose a set of standards that ensure transparency, stability and ensure the coins are truly backed by their fiat counterpart.
According to Circle, there will be three primary use cases of USD Coin and any other fiat coins that come out of Centre. The first will be to act as an easily accessible hedge for crypto traders. This isn’t unheard of. Uphold[3] has been offering ways for users to hold their crypto in a variety of different currencies and commodities. But those aren’t actual coins you can take out of their system. USD Coin will be ERC20 compatible, meaning it should be easily added to most exchanges and in theory should work with any ERC20 compatible wallet.
The second use case is as a trading pair. Most exchanges use Bitcoin as their main trading pair, allowing users to trade other coins against Bitcoin’s value. But with the USD Coin, users should be able to trade any coin against the value of the US dollar.
The last use case is a bit more interesting. As an ERC20 compatible coin, USD Coin can be used in Ethereum Smart Contracts. So rather than denominating
