How does Coinbase stablecoin ensure price stability in the volatile cryptocurrency market?

1 answers

• Dec 28, 2021 · 3 years ago
  Coinbase stablecoin, also known as USDC, ensures price stability in the volatile cryptocurrency market by leveraging the transparency and trust of the Ethereum blockchain. Each USDC token is issued as an ERC-20 token on the Ethereum blockchain, which allows for real-time auditing and verification of the token's collateralization. The Ethereum blockchain provides a transparent and immutable record of all USDC transactions, ensuring that the supply of USDC is always backed by an equivalent amount of real-world assets. This transparency and accountability help to build trust among users and investors, contributing to the stability of USDC's price. Additionally, Coinbase has partnered with various regulated financial institutions to hold and manage the reserve assets backing USDC, further enhancing the stability and reliability of the stablecoin.
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