This is guest post is by my longtime friend, Vito. Enjoy!

It is exciting news that Coinbase just added USDC, its first stablecoin to the already supported array of digital currencies (BTC, BCH, ETH, ETC, LTC, ZRX).

In order to properly describe my excitement, I must first explain what a stablecoin is. In the 1960s, a gallon of gas cost $0.30, or 3 dimes. In October 2018, a gallon of gas now costs a bit over $3.00, but considering pre-1964 dimes were 90% silver, those three 1960s dimes will still get you about a gallon of gas today. So one could say that silver dimes are stablecoins, not because they are dimes, but because they are made of silver. In terms of blockchain, stablecoins are designed to minimize the price volatility and are usually pegged to fiat currencies at a 1:1 ratio. As we tend to think in dollars rather than gallons of gas, bags of rice, or ounces of gold, it is only logical to create stablecoins that are pegged to the fiat currency we use everyday. In the case of USDC, it is United States Dollars. 

USDC is joining an array of existing stablecoins that already exist on the market: Tether (USDT), TrueUSD (TUSD), Paxos Standard Token (PAX), Gemini dollar (GUSD), and Dai Stablecoin (DAI) just to name a few. Those are not the only stable coins in existence; Waves and Ardor platforms have their own versions of digital USD and EUR. What makes USDT, TUSD, PAX, GUSD, DAI, and now USDC, special is that they are accepted by major exchanges, such as Binance, Kraken, Coinbase, Gemini, and HitBTC. 

Maybe exchanges are “evil” and we should all be using Decentralized Exchanges (DEX), but no matter how you feel on the topic, what really unites these stablecoins is that they run on the Ethereum blockchain in a form of ERC-20 tokens. I have to admit there is a slight exception to my statement: while Tether does exist in a form of ERC-20, it’s traded in a much smaller quantity compared to Omni Layer implementation running on the Bitcoin blockchain ($3 Billion on Omni vs $60 Million as ERC20).

I don’t want to get into Tether; despite what people say about it, it is still the biggest kid on the block, but maybe not for long. As of now, Tether has a 24-hour volume of $2.1 Billion USD. This is compared to barely $20 Million PAX/TUSD. At the moment, all ERC-20 stablecoin daily volumes barely make up 10% of Tether’s daily volume, but as more exchanges start to accept these new coins, I would not be surprised to see the volume quadruple in the next couple of months. 

Coinbase acquired Toshi, which is now Coinbase Wallet with built in DApps and some DEX functionality. In my opinion, if you’re using Coinbase, like the vast majority of US crypto users, the transition from paper money to digital money in your Coinbase Wallet should feel natural. I feel that Coinbase will soon compete directly with Venmo, PayPal, Square, ApplePay, and other digital payments. This is extremely important to adoption. We will still be using fiat, but processed by a decentralized Ethereum blockchain. This presents a great opportunity to transact on a blockchain with “nonbelievers,” and those who have faith will be able to convert stablecoins to their favorite coin.

Personally, what I am really excited about is that I can keep my funds in my favorite crypto coin, mainly BTC, ETH, and some XMR and LTC, and settle with my co-workers and friends using USDC sent to their Coinbase Wallet, without hearing their negative, ignorant opinions on crypto currency.