Coinbase is encouraging users to convert their Tether (USDT) holdings to USD Coin (USDC), according to a Dec. 8 blog. Position.
Switch to USD Coin (USDC), a trusted stablecoin. Convert Tether (USDT) to USDC without fees.https://t.co/OObSqNWdpj
— Coinbase (@coinbase) December 8, 2022
According to the US-based exchange, recent events have shown that customers needed stability and trust in a fiat-backed stablecoin during volatile times. For this reason, we clarified that we are waiving the conversion fee.
Coinbase said USDC is fully backed by “high-quality reserves,” adding that it provides transparency through “monthly verifications by Grant Thornton LLP.”
Tether has come under some regulatory scrutiny for failing to provide sufficient transparency about its reserves. The stablecoin issuer recently announced it would reduce its commercial paper holdings to zero and increase its investment in U.S. Treasury bills and short-term government-issued debt.
Crypto Community Wary of Coinbase Offerings
Several stakeholders in the crypto community have questioned Coinbase’s motives, with some describing the move as “desperate.”
It doesn’t look good. A desperate look.
It makes USDC a little less reliable.
— Byzantine General (@BizGeneral) December 9, 2022
Gabor Gurbacs, Strategic Advisor at VanEck, said: Said:
“Tether was the world’s first stablecoin and has been trusted by millions of people around the world since its birth. would choose tether.”
Paolo Ardoino, CTO of Tether, retweeted Gurbacs’ statement.He also retweeted A statement by James Viggy questioning how Coinbase has invested in developing the Bitcoin ecosystem.
Meanwhile, early BTC investor Samson Mow said users should be wary of companies offering free stuff.
Always be careful when companies offer free stuff. Entry doors are usually large, while exit doors are small.
— Samson Mow (@Excellion) December 9, 2022
Tether is still the market leader
According to CryptoSlate data, Tether is the dominant stablecoin in the industry. The company controls about 50% of the market and has over $65 billion in supply. At the time of writing, USDT accounts for 75% of his stablecoin trading volume.
USDC, on the other hand, is the second largest stablecoin with a circulation of $42.7 billion. Its supply dropped by $10 billion after Binance decided to convert user balances from his USDC to BUSD.