Just a couple of months after Binance stopped support for USDC, Coinbase requested it Customers of the United States-based exchange Coinbase have been asked to convert their Tether-issued USDT stable coin to USD Coin, a USD-pegged stable coin issued by Circle and co-founded by the exchange.
In the wake of the FTX collapse saga, the exchange suggested that USDC is a much more secure alternative, and that there is no fee on the conversion of USDT to USDC on its platform.
The firm said something:
“We accept that USD Coin (USDC) is a trusted and legitimate stablecoin, so we’re making it more frictionless to switch: beginning today, we’re postponing fees for worldwide retail customers to change USDT to USDC.”
Stablecoins started out as an on-boarding tool for the exchanges, but have since become a key market player and source of liquidity.
There has always been some scrutiny of their reserves.
A stable coin must be backed by 1USD or equivalent.
Many firms with exposure to the FTX collapse went bankrupt as the reserve debate intensified.
There was an allegation about Changepeng Zhao trading barbs with Sam Bankman-Fried, who was the former FTX CEO.
Tether released its latest quarterly attestation on Nov.10, just a day before the exchange filed for bankruptcy, the exchange filed for bankruptcy on October 10.
According to the survey, 82% of Tether’s reserves were held in cash, cash equivalents, and other short-term deposits as of Sept. 30, 2022.
Coinbase also noted that USDC is 100% backed by “cash and short-dated U.S
treasuries held in the United States are treasuries held in the United States.
” and it is also redeemable 1:1 for United States dollars.”
There is also a raging “stablecoin war” among crypto exchanges, in addition to the debate over reserve audits.
Coinbase’s request to convert USDT to USDC comes just a few months after Binance, another global player, cut support for USDC, resulting in a decrease of $3 billion in the Coinbase co-founded stablecoin’s market cap.
Tether-issued USDT is the largest stablecoin by market value with a market cap of $65 billion, USDC currently sits at a $42 billion market capitalization, but has quickly eroded USDT’s market value.
Binance’s stablecoin, BUSD, has a market cap of $22 billion.
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