United States-based cryptocurrency alternate Coinbase has asked its clients to transform their Tether-issued USDT (USDT) stablecoin to USD Coin (USDC), a USD-pegged stablecoin issued by Circle and co-founded by Coinbase in 2018.
The cryptocurrency alternate steered that USDC is a way more safe various within the wake of the FTX collapse saga and has additionally exempted any payment on the conversion of USDT to USDC on its platform. The agency stated:
“We imagine that USD Coin (USDC) is a trusted and respected stablecoin, so we’re making it extra frictionless to modify: beginning at the moment, we’re waiving charges for international retail clients to transform USDT to USDC.”
Stablecoins began out as an onboarding device for the crypto exchanges within the early days of crypto, however at the moment they’ve turn out to be a key market participant and liquidity supply. Nonetheless, there has all the time been some type of scrutiny round their reserves backing these stablecoins. A stablecoin, by definition, have to be backed by 1 USD or equal.
The reserve debate intensified within the aftermath of FTX collapse as many companies with publicity to the contaminated alternate and its sister firm Alameda Analysis went bankrupt. There was one other allegation about Binance CEO Changepeng Zhao buying and selling barbs with former FTX CEO Sam Bankman-Fried and accusing him of making an attempt to depeg USDT.
post-strike FTX scoop: Simply earlier than the chapter, @cz_binance accused @SBF_FTX of making an attempt to drive down the value of Tether. They traded barbs in a bunch chat with different crypto execs. “The extra harm you do now, the extra jail time,” CZ stated. https://t.co/OTlYgoEruJ
— David Yaffe-Bellany (@yaffebellany) December 9, 2022
Tether revealed its newest quarterly attestation on Nov. 10, only a day earlier than the alternate filed for chapter. The report famous that 82% of Tether’s reserves are held in money, money equivalents and different short-term deposits as of Sept. 30, 2022.
Coinbase additionally confused that USDC is 100% backed by “money and short-dated U.S. treasuries held in U.S. regulated monetary establishments,” and it’s all the time redeemable 1:1 for U.S. {dollars}.
Associated: Circle co-founder says converged greenback books on Binance can be good for USDC
Other than the controversy over reserve audits, there’s a rising “stablecoin battle” amongst crypto exchanges as properly. Coinbase’s request to transform USDT to USDC comes simply a few months after Binance, one other international participant, minimize assist for USDC resulting in a drop of $3 billion available in the market cap of the Coinbase co-founded stablecoin.
Tether-issued USDT is the most important stablecoin by market share with a market cap of $65 billion, USDC at the moment sits at a $42 billion market capitalization however has quickly eaten into USDT’s market share. Binance’s stablecoin, BUSD, at the moment has a market cap of $22 billion.
Tether didn’t reply to Cointelegraph’s requests for feedback at press time.
