Digital dollars are a type of virtual asset known as stablecoin. Simply put, a stablecoin is a virtual currency that keeps its price stable over time thanks to the fact that they are backed by reserves that guarantee its stability and security.
In DolarApp we use USD Coin (USDc), a virtual asset that holds the value 1:1 with the US dollar. For every USDc in circulation, there is a US dollar (USD) deposited in an audited bank account in the United States, guaranteeing the price and its security. Today there is more than $60Bn of USDc in circulation, and the creators of USDc publish monthly audits of their bank accounts to show that each digital dollar is backed by one US dollar.
How can we trust the financial institutions that create each new USDc?
Only licensed financial institutions with anti-money laundering and compliance programs are eligible to apply for USDc. Currently, Circle is the primary creator of USDc, a monetary services company registered with the US Treasury Department’s Financial Crimes Enforcement Network. U.S. and which holds money transfer licenses in 48 states and territories of the U.S. . Circle also has an electronic license from the Financial Conduct Authority’s Money Issuer in the UK.
Why does DolarApp use USDc as its digital dollar?
There are many types of stablecoin linked to the US dollar, but in DolarApp we only work with the most respected and reliable, in our case the USDc. When we evaluate which digital dollar to use, we evaluate different factors such as the total value of the currency in circulation, trading volumes, transparency, security and, above all, trust and governance.
Who trusts in USDc?
There are currently more than $60 billion USDc in circulation. Major financial service providers like Visa are supporting their use and global brands like Wikipedia, NBA and Microsoft are already processing payments using USDc, with many more to come.