According to Coinbase, “We believe that USD Coin (USDC) is a trusted and reputable stablecoin, so we’re making it more frictionless to switch: starting today we’re waiving fees for global retail customers to convert USDT to USDC.”
Crypto exchange Coinbase asked clients to switch to USDC by introducing zero-fee Tether (USDT) to USD Coin (USDC) conversion.
In its blog post, Coinbase highlighted that the recent events surrounding FTX have led to certain “stablecoins being put to the test.” The exchange emphasized that USDC’s 1:1 peg with USD and 100% backing by cash and short-dated US treasuries make it a secure stablecoin.
Meanwhile, USDC’s rival stablecoin, Tether, has come under fire as the company behind the token has lent an enormous amount of USDT as collateral to borrowers. WSJ reported that these ‘secured loans' hit $6.1B and make up 9% of the firm’s total assets by the end of September.
USDT also does not release third-party audits of its reserves. Reeve Collins, Tether Co-Founder, clarified that releasing Proof-of-Reserve audits will force Tether to “disclose exactly what backs these assets.”
Coinbase noted that in contrast, USDC releases monthly audits conducted by Grant Thornton LLP to increase transparency.
In response, Tether’s CTO criticized Coinbase’s actions, adding,
“Tether has higher count and is more directed towards value transfer vs DeFi rebalancing.”
Tether holds the highest market share of $65B among stablecoins, with USD Coin as the second largest stablecoin thanks to its $42.8B market cap.
