- Coinbase claims to be a trustworthy and reputable digital dollar.
- Coinbase ignites the stablecoin war by advising users to switch From Tether’s USDT to USDC.
- The major crypto exchange company reveals that USDC is 100% backed.
Coinbase, one of the leading crypto exchanges in the crypto industry, published a blog post advising its users to refrain from using Tether’s USDT and begin using its USDC on its exchange platform.
The company offered to waive fees initially required of users who might be converting their USDT into USDC. This is a bold move considering that most of Coinbase’s revenue is from fees paid during transactions made on its platform.
With the ongoing stablecoin war, most crypto exchanges are looking inward for development and are promoting their native stablecoins. Coinbase is one of many crypto exchanges to have suggested the conversion of stablecoins.
A few months ago, Binance, another leading cryptocurrency exchange firm in the market, halted support for Coinbase’s USDC in promoting its stablecoin, BUSD, automatically converting all customers’ USDC into BUSD. However, since it was ousted from Binance’s exchange platform, Coinbase and its affiliate firm, Circle, have devised other plans to boost the company’s productivity.
Tether’s USDT is the world’s leading stablecoin with a recorded market cap of $65 billion. Coinbase’s USDC is rapidly becoming a powerful rival of the former stablecoin, owning a market cap of $42.7 billion.
Coinbase indicated that the USDC stablecoin—issued by Circle and co-founded by Coinbase—was a secure option, given the recent catastrophic events with FTX, which has sent the crypto market crashing as everyone experienced the harsh weather of the bear market.
After FTX filed for Chapter 11 bankruptcy, speculations began spreading as investors became worried about the reserves backing stablecoins due to the dominoes effect of the FTX crash leading to many crypto firms filing for bankruptcy and losing funds because of their massive exposure to the disgraced Bahamas-based crypto exchange.
Back in November, Tether released its quarterly attestation report, showing that the company had about 82% of its reserve in cash and other temporary deposits, while Coinbase stated that its stablecoin, USDC, was 100% backed by money and short-dated USA’s treasuries kept in the country’s regulated financial organizations.
“The past few weeks’ events have put some stablecoins to the test, and we’ve seen a flight to safety. We believe that USD Coin (USDC) is a trusted reputable stablecoin,” Coinbase said in its blog post.
To incentivize its users to convert their USDT into USDC, Coinbase mentioned that it would waive fees for its global retail users. This is an opportunity for anyone who’s looking to switch stablecoins.
What are Stablecoins?
Stablecoins are cryptocurrencies with prices fixed to an asset, most commonly, the U.S. dollar. They perform as a bridge between blockchain-traded digital assets and fiat currencies.
Stablecoins initially began as onboarding tools for crypto exchanges, but they have transformed and secured a significant role in the crypto industry. A stablecoin is backed by U.S. $ 1 or its equivalent.
Coinbase’s USDC was founded in 2018 to build a free and global economic system. USDC provides a monthly attestation by one of America’s largest audit, advisory, and tax firms, Grant Thornton LLP.
The crypto exchange expressed that its reason for suggesting its users switch from USDT to USDC is in their favor, as it is focused on finding reliable ways for customers to hold and grow their crypto.
Expressions of the Crypto Community
Since Coinbase announced its suggestion on Twitter, the crypto community has expressed their thoughts on switching Tether’s USDT to Coinbase’s stablecoin, USDC.
“The team behind tether is reinvesting into the bitcoin ecosystem with developments like holepunch (keet). What has coinbase ever done for bitcoin? Does Coinbase even know how to use lightning yet?” A Twitter user said.
“Tether was the first stablecoin in the world and has been trusted by millions worldwide since its inception. If you ask people outside a narrow group in the U.S., they pick tether over USDC.” Founder of PointsVilleApp, Gabor Gurbacs, retorted.
Conclusion
Coinbase, one of the crypto industry’s leading crypto exchanges, has suggested that its users convert their Tether’s USDT for its native stablecoin, USDC, at zero costs. The crypto community has received this news with mixed feelings as everyone is wondering what the company’s endgame is.
