Soon, you might have the ability to use cryptocurrency to spend for anything from your morning tea to your late night dinner and entertainment. And you could do it as easily as you utilize your credit card or more specifically, Venmo today.
Circle, a payment start-up owned by Goldman Sachs, announced on Tuesday that it is launching a new cryptocurrency called the Circle USD Coin (USDC). The new currency is essentially a digital variation of the dollar that you’ll have the ability to acquire by trading in, you know, real money.
The Circle USD Coin is the first cryptocurrency launched by a major financial institution. While this sort of goes against the entire point of decentralized and dispersed cryptocurrencies like bitcoin, Goldman Sachs and Circle wish to bring some stability to the cryptocurrency market, which has crashed and rebounded a stressful number of times this year alone.
Circle does not want its USDC to be subject to the inflation and instability inherent to other unregulated cryptocurrencies, so it will peg the value of a coin to that of a United States dollar, according to CNBC. Once again, this pretty much breaks the entire point of cryptocurrencies, which were initially designed to provide a transparent financial market free of regulation and control from any government and the influence of big banks. And though it has seemed increasingly likely that regulation and corporate power will play a more significant role in the area, some, including big Silicon Valley investor Sam Altman, staunchly believe that any USD-based cryptocurrency needs to stay under distributed control.
While other cryptocurrencies can be mined when users provide a part of their computer system’s processing power to assist maintain the updated journal of all transactions, it looks like the only method to obtain new USDC — which will run on the Ethereum platform for the foreseeable future — is to buy them. So your extensive mining rig will not help you get more USDC — looks like you will just need to purchase it. With real dollars.
Considering that you have to give Circle one (1) dollar whenever you would like one (1) USDC, it looks like the currency will serve more like an open-source Venmo, where you can spend for things with a digital cryptocurrency rather than paying with a credit or debit card.
Given Goldman Sachs’ recent investments in the crypto world and statement that the company would trade Bitcoin on behalf of investors, it makes sense that the financial giant is attempting to control the marketplace as best it can.
So in the meantime, the USD Coin does not appear to have any useful function beyond presenting a steady and perhaps available cryptocurrency. For the foreseeable future, a dollar in your hand has to do with the like a dollar on the USD Coin blockchain.