Ovex opens up USDC to all its exchange users
Ovex adds USD coin to its request for quote service, allowing users to buy and sell this popular stablecoin with ease
You can now buy and sell USD coin on SA cryptocurrency exchange Ovex, which offers both a ZAR on-ramp and off-ramp for this popular USD stablecoin.
Because USDC is tethered 1:1 to the US dollar, it has proven popular among SA crypto arbitrageurs. According to head of trading at Ovex Tom Masojada, a substantial amount of clients trading volume through the Ovex over-the-counter (OTC) desk are changing hands with USDC to profit off the crypto arbitrage premium.
“Ovex clients can now sell USDC directly for rand at the same local premium that bitcoin trades at — with tight spreads and zero fees. We specialise in best pricing on high-volume trades,” says Masojada.
This is a game-changer; pre-Ovex, this process proved costly and time-consuming:
One would buy USDC with dollars. This USDC was then sent to an offshore crypto exchange and used to buy BTC. This BTC was then sent to a local exchange, such as Luno, and sold for rand at a profit. Add volume to the mix and executing a trade of this nature becomes even more precarious.
Once reserved for OTC clients only, USDC is now available to all Ovex exchange users. Now you can leverage the power of Ovex’s deep liquidity at the simple click of a button.
What is USD coin (USDC)?
USDC is one of the world’s fastest-growing, regulated dollar-digital stablecoins — issued by payments behemoth Circle. At the time of writing, there are 29.4-billion fully collateralised USDC in circulation. Hundreds of companies support the USDC standard, including: digital wallets, exchanges, DeFi (decentralised finance) protocols, savings, lending and payment services.
Stablecoin use cases
Stablecoins enable investors to generate yield on their crypto assets in the DeFi space while simultaneously alleviating the adverse effects of market volatility. This is why Ovex offers cryptocurrency interest accounts where you can safely store your USDC and generate an impressive 9% annualised yield.
This approach is popular for investors looking for superior yields to those offered in traditional fixed-interest investments (such as savings accounts, money market funds or bonds). Many seasoned cryptocurrency investors park their cryptocurrency profits in high-yielding, low-risk USD stablecoin protocols of this nature.
In general, stablecoins such as USDC are used for the following financial functions:
- Lending: stablecoin lending is one of the most high-yield opportunities for debt investors;
- Payments: avoid the 2%-3% transaction fees waged by financial intermediaries;
- Remittance: send money instantly, globally, securely and at low cost;
- Reduce crypto exposure without fully cashing out;
- Safe-haven asset;
- Hedge against hyperinflation (especially for people living in countries such as Venezuela or Turkey); and
- Purchase items in various crypto dApps, exchanges, and blockchain-based games.
In recent times, wealth managers have turned to USDC as a hedge against rand volatility, especially in the wake of Chinese property developer Evergrande’s imminent debt crisis. Last week, MSCI’s index of emerging market currencies fell 1.44% to hit a three-week low, with the rand’s 1.52% drop to 14.795 leading the pack. The spillover effect this crisis will have in emerging markets, such as SA, has investors concerned about future rand stability.
This article was paid for by Ovex.
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