Coinbase Asks Customers to Convert USDT to USDC
In an official blog on December 8, Coinbase asks users to convert their USDT to USDC, waiving the conversion fees. Coinbase claims USD Coin (USDC) is a trusted and reputable stablecoin and provides customers stability and confidence during times of volatility.
Coinbase indirectly attacked Tether (USDT) for its quality of reserves, which had slightly depeg during volatile market conditions. The USDT also depeg and traded below $0.95 against the US dollar during the collapse of FTX. Tether has also been questioned many times for its quality of reserves.
On-chain data indicates that USDT is the third-most widely traded digital asset on Coinbase, representing 5% of the volume on the crypto exchange.
Coinbase cites that the events of the past few weeks have put some stablecoins to the test which has made them take the decision to switch to USDC, which it co-founded in 2018. It refers USDC as a “trusted and reputable stablecoin” with cash and short-dated U.S. treasuries held in U.S.-regulated financial institutions. Also, it allows customers earn up to 1.5% APY on their USDC holdings with Coinbase.
Tether CTO Paolo Ardoino criticized the decision of Coinbase to ask its users to convert USDT to USDC. Other Twitter users have also questioned the move by Coinbase.
Gabor Gurbacs, director of digital assets strategy at VanEck, asserts Tether is trusted by millions around the world and people will pick USDT over USDC.