- Coinbase has published a blog calling for the conversion of all the USDT present on the exchange to USDC.
- The exchange will waive the fees for global users to convert USDT to USDC.
- Coinbase describes USC as the “trusted and reputable digital dollar.”
- Previously, Binance delisted all USDC trading pairs.
The biggest crypto exchange in the United States, Coinbase, has published a blog calling for the conversion of all the USDT present on the exchange to USDC, which it claims to be more “trusted and reputable digital dollar.” Interestingly, this move comes just a few months after the world’s biggest crypto exchange called for a similar conversion of USDC, TUSD, and USDP to BUSD.
Tether USD or USDT, the biggest stablecoin by market capitalization which is tied to the US dollar in 1:1 ratio, has been leading the crypto space for a very long time and its nearest competitors are Circles USDC and Binance BUSD. These three stablecoins have gained significantly more popularity following the collapse of UST or the Terra USD stablecoin.
As per a blog post from Coinbase on Dec. 8, the crypto exchange asked all of its customes and the crypto enthusiasts to switch to a more trustworthy stablecoin, i.e., USDC, which has been described as “one of the most trusted and reputable digital dollars, fully backed with high-quality reserves.”
“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,” said Coinbase in the blog post.
The Brian Armstrong-led exchange stated that the past few months have been very volatile and hearbreaking for the crypto space and have led to a “flight to safety” in the community. Many investors have started questioning the reserves of crypto exchanges and stablecoin protocols following the collapse of multi-billion dollar platforms FTX and Terra.
Coinbase explained that USDC, a stablecoin formed in 2018, “is unique in that it’s 100% backed by cash and short-dated U.S. treasuries held in U.S. regulated financial institutions” and is “always redeemable 1:1 for U.S. dollars.” The blog added that USDC follows the principle of transparency and “delivers via monthly attestations by Grant Thornton LLP, one of America’s largest audit, tax, and advisory firms.”
Furthermore, another benefit of holding the stablecoin in Coinbase is getting a 1.5% APY on the holdings. However, newly established stablecoins like the USDD and the USN offer significantly higher APY but these are algorithmic stablecoins and people have lost faith in these type of stablecoins following the depegging of UST, which was also an algorithmic stablecoin.
Recently, a report was circulated in the crypto space wherein it was revealed that the US authorities believe that the founder and former CEO of FTX, Sam Bankman-Fried, was behind the collapse of Terra as well. Do Kwon, the mastermind of the Terra disaster, stated that “what’s done in darkness will come to light,” in a Twitter post while sharing the news.
Recently, Binance, the leading crypto exchange, delisted USDC from its platform as many people began to get worried. However, Circle CEO Jeremy Allaire stated that move to automatically convert USDC and two other stablecoins might lead to more USDC flowing into the exchange platform. Allaire believes that combined dollar books will make it simpler to transfer USDC to and from Binance for trading core markets, according to Allaire.