Coinbase, a cryptocurrency exchange, encouraged its users in an official blog post on December 8 to convert their USDT to USDC. According to Coinbase, USD Coin (USDC) is a reputable stablecoin that offers clients stability and confidence during times of turbulence.
Coinbase did not explicitly state why it made this decision but claimed that recent events had put some stablecoins to the test and USDC has proved to be a safe haven.
The exchange believes that USD Coin (USDC) is a trustworthy and respected stablecoin. So it is making switching easier by waiving conversion costs for global retail customers converting USDT to USDC.
Coinbase co-founded USDC in 2018 with the goal of building a more open, global financial system. According to Coinbase, the USDC is unique in that it is entirely backed by cash and short-term US Treasury securities held in US-licensed financial institutions.
Coinbase is believed to be indirectly attacking Tether (USDT) for its reserve quality, which has slightly depegged amid turbulent market conditions. During the fallout from FTX’s collapse, USDT depegged and traded below $0.95 versus the US dollar. Tether’s reserve quality has also been called into question on numerous occasions.
According to on-chain data, USDT is the third-most traded digital asset on Coinbase, accounting for 5% of the total trading volume on the crypto exchange.
Tether’s CTO, Paolo Ardoino, criticized Coinbase’s plan to force users to convert USDT to USDC. He responded to the Coinbase tweet with a cat GIF and vaguely to others who asked if it was personal.
why are they doing this, Paolo?
is it personal?— fomo_sapiens (@fomo_eREKTus) December 8, 2022
No way…
— Paolo Ardoino 🍐 (@paoloardoino) December 8, 2022
Other Twitter users have also reacted to Coinbase’s decision. Gabor Gubacs, VanEck’s Director of Digital Asset Strategy, stated that Tether, the first stablecoin, is trusted by millions of people worldwide. He went on to say that people in the United States would prefer Tether to USDC.
Tether was the first stablecoin in the world and has been trusted by millions around the world since its inception. In fact if you ask people outside a narrow group in the US they’d pick tether over USDC.
— Gabor Gurbacs (@gaborgurbacs) December 9, 2022
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