Coinbase takes a shot at Tether, encourages users to switch to USDC

United States-based cryptocurrency speech Coinbase has asked its customers to person their Tether-issued USDT (USDT) stablecoin to USD Coin (USDC), a USD-pegged stablecoin issued by Circle and co-founded by Coinbase successful 2018.

The cryptocurrency speech suggested that USDC is simply a overmuch much unafraid alternate successful the aftermath of the FTX illness saga and has besides exempted immoderate interest connected the conversion of USDT to USDC connected its platform. The steadfast said:

“We judge that USD Coin (USDC) is simply a trusted and reputable stablecoin, truthful we’re making it much frictionless to switch: starting today, we’re waiving fees for planetary retail customers to person USDT to USDC."

Stablecoins started retired arsenic an onboarding instrumentality for the crypto exchanges successful the aboriginal days of crypto, but contiguous they person go a cardinal marketplace subordinate and liquidity source. However, determination has ever been immoderate signifier of scrutiny astir their reserves backing these stablecoins. A stablecoin, by definition, indispensable beryllium backed by 1 USD oregon equivalent.

The reserve statement intensified successful the aftermath of FTX illness arsenic galore firms with vulnerability to the tainted speech and its sister institution Alameda Research went bankrupt. There was different allegation astir Binance CEO Changepeng Zhao trading barbs with erstwhile FTX CEO Sam Bankman-Fried and accusing him of trying to depeg USDT.

post-strike FTX scoop: Just earlier the bankruptcy, @cz_binance accused @SBF_FTX of trying to thrust down the terms of Tether. They traded barbs successful a radical chat with different crypto execs. “The much harm you bash now, the much jailhouse time," CZ said. https://t.co/OTlYgoEruJ

— David Yaffe-Bellany (@yaffebellany) December 9, 2022

Tether published its latest quarterly attestation connected Nov. 10, conscionable a time earlier the speech filed for bankruptcy. The study noted that 82% of Tether’s reserves are held successful cash, currency equivalents and different short-term deposits arsenic of Sept. 30, 2022.

Coinbase besides stressed that USDC is 100% backed by “cash and short-dated U.S. treasuries held successful U.S. regulated fiscal institutions,” and it is ever redeemable 1:1 for U.S. dollars.

Related: Circle co-founder says converged dollar books connected Binance would beryllium bully for USDC

Apart from the statement implicit reserve audits, determination is simply a increasing “stablecoin war” among crypto exchanges arsenic well. Coinbase’s petition to person USDT to USDC comes conscionable a mates of months aft Binance, different planetary player, chopped enactment for USDC starring to a drop of $3 cardinal successful the marketplace headdress of the Coinbase co-founded stablecoin.

Tether-issued USDT is the largest stablecoin by marketplace stock with a marketplace headdress of $65 billion, USDC presently sits astatine a $42 cardinal marketplace capitalization but has rapidly eaten into USDT’s marketplace share. Binance’s stablecoin, BUSD, presently has a marketplace headdress of $22 billion.

Tether didn’t respond to Cointelegraph’s requests for comments astatine property time.