Coinbase has requested that users switch from Tether (USDT) to Circle’s USD Coin (USDC), referring to USDC as a “trusted and reputable stablecoin.”
While the primary reason is unknown, Coinbase believes recent events have prompted them to switch to a stablecoin it co-founded in 2018.
The exchange said in a blog post:
“The events of the past few weeks have put some stablecoins to the test and we’ve seen a flight to safety. We believe that USD Coin (USDC) is a trusted and reputable stablecoin.”
The exchange said that it would no longer charge fees for worldwide retail customers converting USDT to USDC.
According to the exchange, recent events have put several stablecoins to the test, prompting the company to move to USDC, which it co-founded in 2018.
It refers to USDC as a “trusted and reputable stablecoin” that is backed by cash and short-term US Treasury bonds held in US-regulated financial institutions. Customers may now earn up to 1.5% APY on their USDC assets with Coinbase.
Tether (USDT) was indirectly criticized by Coinbase for the quality of its reserves, which had somewhat depegged amid turbulent market conditions. During the collapse of FTX, the USDT also depegged and traded below $0.95 versus the US dollar. Tether’s reserve quality has also been called into doubt several times.
According to CoingGecko data, USDT is the third-most traded digital asset on the exchange, accounting for 5% of the total volume on the crypto exchange.
Tether CTO Paolo Ardoino questioned Coinbase’s plan to require users to convert USDT to USDC. Other Twitter users have questioned Coinbase’s decision.
However, Binance has since discontinued support for USDC, instead changing client holdings into its own stablecoin BUSD. It appears that exchanges are now attempting to evaluate their own stablecoins.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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