Origin Announces Support For Circle’s USDC Stablecoin In Decentralized Marketplaces
By: Jon Hearty
Tags: Finance, Cryptocurrency, Money, Partnerships, Ethereum

Circle is a reputable and well-funded organization that has always been focused on the blockchain ecosystem, pursuing an integrated strategy from day one of providing products and services for consumers, retail and institutional investors. They are re-imagining the entire consumer finance stack built on blockchain technology and cryptocurrency assets, and we’re excited to see them investing resources into stablecoins.

The Problem Of Cryptocurrency Price Volatility For Decentralized Marketplaces

Even for simple online marketplaces that facilitate the buying and selling of goods, price volatility has an effect. If you list your cryptokitty for 1 ETH, that may be $250 today and $200 or $300 tomorrow. As more time passes between the listing of the item and the day it sells, the likelihood of a nominal price change increases. This uncertainty, which is not present in the fiat-denominated centralized marketplaces, is a glaring problem that must be addressed with solutions like stablecoins.

Furthermore, for marketplaces that facilitate the purchase of a service that may not be rendered until much later in the future, price volatility of the payment currency will inevitably create a scenario in which one party — either the buyer or the seller — is going to see a significant gain while the other will see a loss of the same amount. For example, if I booked a house rental in January 2018 for my Hawaii vacation in October and paid in bitcoin, I will have paid more than double what I could have if I had paid in US dollars.

When time is introduced into a transaction, the price volatility of the payment currency becomes an additional limiting factor in a user’s willingness to transact, and this risk will be a non-starter for many, creating too much friction for them to transact comfortably on the marketplace.

We have been keeping close tabs on numerous stablecoin projects that are using many different approaches. We plan to support multiple ERC 20 stablecoins and are happy that a company with the reputation of Circle is getting involved in the space.

Circle’s issuance of USDC brings three important elements to the table that make it an easy decision to support:

Transparency: Transparency creates trust, and trust is a necessary element in giving users reason to believe the stablecoin will remain stable over the long term. Like Origin, Circle decided to build USDC on open source protocols and leverage the ERC 20 standard that is already compatible with our platform. Liquidity: USDC is backed by a 1:1 reserve ratio, a rarity for stable coins that gives it an extra degree of stability in the short term as algorithmic approaches mature over the long term. Also, a company as big as Circle is more likely to survive the ups-and-downs of the market and will be able to approach the space with a longer time-horizon. Reputation: A brand people already know and love will make user adoption of the USDC stablecoin easier over the long-term.

Centre also leverages a lot of technology that Circle already built, with an early form of the protocols already in production today servicing millions of customers in Circle’s ecosystem.

We look forward to the many Origin-powered marketplaces that will be able to buy and sell with USDC and other stablecoins to create a better experience for users.

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