Coinbase offers users to switch to USDC
2022.12.09 05:11
Coinbase offers users to switch to USDC
Budrigannews.com – Coinbase, a cryptocurrency exchange based in the United States, has asked its customers to exchange their USDT (USDT) stablecoin, which was issued by Tether, for USD Coin (USDC), a USD-pegged stablecoin that was issued by Circle and co-founded by Coinbase in 2018.
After the FTX collapse, the cryptocurrency exchange suggested USDC as a safer alternative and has waived any fees associated with USDT to USDC conversions on its platform. The company said:
“We believe that USD Coin (USDC) is a trusted and reputable stablecoin, so we’re making it more frictionless to switch: starting today, we’re waiving fees for global retail customers to convert USDT to USDC.”
In the early days of cryptocurrency, stablecoins served as an onboarding tool for crypto exchanges. Today, however, they are a significant market player and a source of liquidity. However, their reserves supporting these stablecoins have always been the subject of some kind of scrutiny. By definition, a stablecoin must be backed by at least one United States dollar.
As a result of the bankruptcy of numerous businesses that had an interest in the tainted exchange and its sister company, Alameda Research, the reserve debate became even more heated. Another claim was that Binance CEO Changepeng Zhao traded barbs with Sam Bankman-Fried, the former CEO of FTX, and accused him of attempting to depeg USDT.
post-strike FTX scoop: Just before the bankruptcy, @cz_binance accused @SBF_FTX of trying to drive down the price of Tether. They traded barbs in a group chat with other crypto execs. “The more damage you do now, the more jail time,” CZ said. https://t.co/OTlYgoEruJ
— David Yaffe-Bellany (@yaffebellany) December 9, 2022
Tie distributed its most recent quarterly confirmation on Nov. 10, simply a day prior to the trade sought financial protection. As of September 30, 2022, the report stated that cash, cash equivalents, and other short-term deposits account for 82% of Tether’s reserves.
Additionally, Coinbase emphasized that USDC is always redeemable 1:1 for U.S. dollars and is 100% backed by “cash and short-dated U.S. treasuries held in U.S. regulated financial institutions.”
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In addition to the controversy surrounding reserve audits, crypto exchanges are also engaged in a growing “stablecoin war.” Coinbase’s request to convert USDT to USDC comes just a few months after Binance, another global player, stopped supporting USDC, resulting in a $3 billion decrease in the stablecoin’s market capitalization.
USDC currently has a market capitalization of $42 billion, but it has rapidly taken USDT’s market share away from USDT, which is the largest stablecoin by market share with a market cap of $65 billion. USDT is issued by Tether. BUSD, Binance’s stablecoin, currently has a $22 billion market cap.
