USDC

I just bought some US Dollars today. I do that many days. But the dollars I bought today are crypto assets, like Bitcoin and Ethereum. These US Dollar assets are called USDC and they are issued by an industry consortium called Centre, led by Circle and our portfolio company Coinbase. I expect many other companies will join the Centre consortium in the coming months and years.

I have been waiting to buy USDC for quite a while. As a NY State resident, I was prohibited from buying them on Coinbase, where I like to buy and hold my crypto assets. I read this morning that the NYS DFS had finally greenlit the sale of USDC to NYS residents and I went to Coinbase and made my purchase.

USDC is a stablecoin, like Tether or Libra. It is designed such that it has a stable value. I bought my USDC tokens for a dollar each this morning. The idea is that I will be able to sell them for a dollar each in an hour, a day, a week, a month, a year, or a decade.

They way Centre does this is they have a reserve. Everybody that spends dollars to buy USDC invests those dollars in the USDC reserve. And so when I want to sell USDC, the reserve is there to supply real dollars to me. The USDC reserve is audited and you can see the audit reports here.

So why would I want crypto dollars vs paper dollars or dollars in a bank account? Well for one, crypto dollars, like other crypto assets, ride on crypto rails. I can send my crypto dollars from my Coinbase wallet to your Coinbase wallet, your Ledger wallet, or many other crypto wallets.

USDC is built on Ethereum and is an ERC-20 token. So it uses crypto standards to ride on these crypto rails.

But more than all of that, USDC are programmable dollars. This is a big deal. Kind of like the difference between an MP3 file and song on a cassette tape. Once an asset is natively digital, without any strings attached, and can be programmed and routed digitally, interesting things happen.

If you have cash balances in your Coinbase account, consider using at least some of them to buy USDC. Then send them around to friends and family. It will feel like using Venmo today. But that is just the start of a lot more to come once programmers start building apps that accept USDC and other crypto assets.

We are emerging from a two year crypto winter right now. Lot’s of interesting things are starting to happen. It’s exciting to see.