Coinbase, the second largest exchange by volume, is encouraging users to switch from USDT to USDC, “the trusted and reputable digital dollar.” The platform will waive all fees for converting USDT to Circle-owned USD Coin (USDC).
Switch to a trusted stablecoin: USD Coin (USDC). Now convert Tether (USDT) to USDC with zero fees.https://t.co/OObSqNWdpj— Coinbase (@coinbase) December 8, 2022
The announcement repeatedly emphasized the importance of stability and trust.
Now more than ever, stability and trust are of the utmost importance to customers. Fiat-backed stablecoins (cryptocurrencies pegged to reserve assets like the U.S. dollar) provide customers stability and confidence during times of volatility.
reads Coinbase’s announcement.
However, the events of the past few weeks have put some stablecoins to the test and we’ve seen a flight to safety. 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.
The move was a jab at rival stablecoin Tether, which continues to lead the market. According to Coingecko, USDT is the largest stablecoin in crypto, with a market capitalization of $65 billion. Circle, a Coinbase-affiliated company that co-founded the stablecoin in 2018, issues USDC, and it is the second largest at $42 billion.
Tether (USDT) was knocked off its peg days after the FTX collapse and traded as low as 93 cents. The majority of trading pairs on exchanges have returned to $1, though CoinGecko data shows that some pairs at Binance continue to trade at 99 cents.
Tether has yet to release a full audit, but it insists that its reserves are fully backed. A US judge in New York ordered Tether to produce financial records relating to USDT backing in late September. Tether, the company that issues USDT, has faced scrutiny over the reserves backing its stablecoin since its inception. On December 2, the firm lashed out at mainstream media misinformation about rising loan risks.
Crypto firms are picking sides when it comes to stablecoins and their trustworthiness. Binance, the world’s largest crypto exchange, stopped supporting USDC in September and began converting users’ stablecoin balances into its own BUSD token.