USD Coin (USDC) is a stablecoin, a type of cryptocurrency that is pegged to a fiat currency, in this case, the US dollar. This means that each USDC is theoretically worth $1. USDC is issued by Circle, a financial technology company, and is backed by a reserve of US dollars held in regulated financial institutions.
When you load money into Velo, we convert Real into USDC in your wallet, and all transfers between Velo users are conducted in USDC. When you move money from Velo into your bank account, it's automatically converted to Real at the best possible FX rate.
Regulation of USDC
USDC is regulated in a number of ways. First, it is subject to the laws governing money transmission in the various US states and territories. This means that Circle must obtain a license from each state in which it wants to operate and that it must comply with all applicable anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.
Second, USDC is subject to the scrutiny of the US Securities and Exchange Commission (SEC). The SEC has stated that it considers stablecoins to be securities, and that any stablecoin issuer that is engaged in the sale of securities must register with the SEC and comply with its regulations.
Third, USDC is also subject to the scrutiny of the Commodity Futures Trading Commission (CFTC). The CFTC has stated that it has jurisdiction over certain aspects of the stablecoin market, such as the clearing and settlement of stablecoin transactions.
Enforcement of USDC Regulations
The enforcement of USDC regulations is carried out by a number of different agencies. The primary responsibility for enforcing the laws governing money transmission lies with state attorneys general. The SEC and the CFTC also have authority to enforce their regulations against USDC issuers.
Compliance with USDC Regulations
Circle has a strong track record of compliance with USDC regulations. The company has obtained money transmitter licenses in all 50 states and territories, and it has implemented robust AML and CTF controls. Circle has also been cooperative with regulators, and it has provided them with regular updates on its operations.