USD Coin (USDC) is an ERC-20 token that launched in late 2018. It’s a stablecoin that is pegged to the United States Dollar (USD) on a 1:1 basis.
For every USDC that is available on the market, there is an equivalent number of USD that are held. Coinbase claims that “these funds are held in a special bank account that is constantly monitored and audited”.
But how do you buy USD Coin (USDC) in the UK?
Check out this quick guide to learn how.
Best Ways to Buy USDC in the UK
1. Coinbase Pro
Coinbase Pro is one of the best places where you can buy USD Coin (USDC) in the UK.
Although you can buy USDC directly with GBP, you could also use half a dozen other currencies to buy it too.
You can deposit GBP into Coinbase Pro with a UK bank transfer for FREE. You’ll then pay up to 0.5% in fees whenever you buy or sell something on this exchange.
CoinJar is one of the cheapest places in the UK to buy USDC directly with GBP.
You can deposit GBP with a UK bank transfer for FREE. After my initial deposit, I’ve found that my transfers have been quickly credited to my CoinJar account (within minutes).
You can then buy USD Coin (USDC) and other supported cryptocurrencies quickly and easily through their browser interface or mobile app.
You’ll be charged a fixed 1% fee whenever you buy or sell anything on CoinJar. The exchange rates you’re quoted might sometimes be a little higher than you can find elsewhere (but when I’ve checked, not by much at all).
It’s worth clarifying: these exchange rates are pulled from the CoinJar Exchange – so they’re set by other people, NOT CoinJar. These exchange rates do appear to be getting closer and closer to what you’ll find elsewhere.
While this option is more expensive, it is much more beginner-friendly.
What is USD Coin (USDC)?
USD Coin (USDC) is a stablecoin that’s pegged to the value of the US dollar (USD). It was originally launched on the Ethereum network, but you can now transact with USD Coin (USDC) on multiple blockchains – including Avalanche, Solana, Algorand, Stellar, and Tron.
First released in 2018, USD Coin (USDC) is issued and backed by the Centre Consortium. This is a collaboration between Coinbase (one of the world’s leading crypto exchanges) and Circle (a fintech company that specialises in global digital payments).
Here’s a quick video that explains how USD Coin (USDC) works:
As a stablecoin, the primary purpose of USD Coin (USDC) is to track the price of its underlying asset – which, in this case, is the US dollar (USD).
USD Coin (USDC) maintains its US dollar peg by backing each USD Coin (USDC) with actual US dollars or dollar-denominated assets that are held in reserve. Theoretically, each USD Coin (USDC) is redeemable 1:1 for a US dollar.
The consortium that issues USD Coin claims that it holds all fiat reserves at regulated US financial institutions. Centre also states that the independent financial advisory service Grant Thorton publishes monthly attestation reports from audits of the fiat reserves that back USD Coin (USDC).
USD Coin (USDC) effectively functions in much the same way as other fiat-backed stablecoins, such as Tether (USDT), Gemini Dollar (GUSD), and Pax Dollar (USDP).
The potential advantage of fiat-backed stablecoins like USDC is that they don’t rely on smart contracts to maintain their stable price, as is the case with algorithmic stablecoins like DAI or TerraUSD (UST). The fear with algorithmic stablecoins is that they can be corrupted by smart contract bugs or market manipulation.
However, anyone using fiat-backed stablecoins needs to trust that the coin issuer has enough money in reserve to back all the coins in circulation. The inherent centralisation of fiat-backed stablecoins is also a concern to many investors that prioritise decentralisation above all else.
The main benefit of holding USD Coin (USDC) is that it gives you access to a wide array of decentralised finance (DeFi) applications.
USD Coin (USDC) can be used as a price-stable alternative to the US dollar (USD) when yield farming or taking out crypto-backed loans using DeFi apps. Many decentralised exchanges (DEXes) also use USD Coin (USDC) as a stand-in for US dollars (USD) when placing trades.
When compared to other fiat-backed stablecoins, one of USD Coin’s (USDC) biggest advantages is that it’s available on multiple blockchains. This includes Ethereum, Avalanche, Tron, and Solana, among others.
While there are other stablecoins that also exist on multiple blockchains (USDT and UST are two notable alternatives), few stablecoins are available on as many networks as USD Coin (USDC). This gives USD Coin (USDC) a leg up for investors and traders that are looking to avoid the high gas prices associated with DeFi applications on the Ethereum network.
Best USD Coin (USDC) Wallets
There are dozens of wallets that you can use to store the private keys to your USD Coins (USDC).
However, since USD Coin (USDC) is available on multiple blockchains, it’s important that you send your coins to the correct address when transferring them to your private wallet.
Note that if you purchased your coins on an exchange, you’ll almost always end up with the ERC-20 token version of USDC. But always double-check your wallet’s public address to confirm the network that you’re using before you transact with your coins. If you send your USD Coin (USDC) to the wrong address, your coins could be lost forever.
Some of the best software wallets for USD Coin (USDC) include:
- MetaMask: This is a mobile app and browser extension that can support all ERC-20 tokens, including USDC. You can also configure it to support the Avalanche version of USDC. Plus, MetaMask has direct integrations with most major DeFi applications.
- Atomic Wallet: One of my favourite multi-currency wallets, Atomic Wallet is a mobile and desktop app that supports coins and tokens on most major networks. It supports the ERC-20 and the Tron (TRC-20) versions of USDC.
- Trust Wallet: Designed by the team at Binance, Trust Wallet is a non-custodial wallet that’s available as a mobile app. It supports all ERC-20 tokens, including USDC, as well as tokens on a number of other top blockchains. Trust Wallet also supports the Solana (SPL) version of USDC. The wallet also has a built-in decentralised app (DApp) browser so you can quickly connect to your favourite DeFi platforms.
Want to use a hardware wallet instead?
Most major Ethereum-compatible hardware wallets support the ERC-20 version of USDC on their wallet interfaces. Some of the best hardware wallets for the ERC-20 version of USD Coin (USDC) include:
Additionally, both Ledger devices support the Tron (TRC-20) and Algorand (ASA) versions of USDC.
Thanks for checking out this guide on how to buy USD Coin (USDC) in the UK!
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