Shao Bank: The Future of Banking with Neobank Strategy
March 13, 2024
Crypto Exchange Coinbase Advises Users To Convert USDT to USDC
Coinbase has published a blog encouraging people to convert USDT to USDC at no cost.
The exchange clearly targeted Tether (USDT) due to reserve adequacy.
Coinbase, a cryptocurrency exchange, has urged its users to switch from Tether (USDT) to Circle's USD Coin (USDC), describing the latter as a "reliable and reliable stablecoin". The underlying reason for the change is unclear, but Coinbase believes that recent events have prompted the move.
On December 8, Coinbase published a blog encouraging people to convert USDT to USDC at no cost. Also, according to Coinbase, USD Coin (USDC) is a stable and reliable cryptocurrency that gives users peace of mind in uncertain market conditions.
Reliability of Tether reserves
During periods of market volatility, Coinbase has hit Tether (USDT) hard for the adequacy of its reserves, which have diverged somewhat. During FTX's fall, USDT was irrelevant and fell below $0.95. Moreover, the reliability of Tether reserves has come into question.
Based on available data, USDT is the third most traded cryptocurrency on Coinbase, accounting for about 5% of total volume.
Coinbase claims that recent events have put some stablecoins to the test, leading it to switch to USDC, which it co-founded in 2018. The USDC stablecoin is backed by institutionally held cash and short-term US Treasury notes. Financial institutions that are supervised by the Federal Reserve System and other federal agencies in the United States. Additionally, Coinbase users can earn up to 1.5% APY on their USDC holdings.
Paolo Arduino, Tether's Chief Technology Officer, has spoken out against Coinbase's intention to force users to exchange USDT for USDC. Coinbase's decision has also been questioned by several members of the community. Trading volume on Coinbase has been low for quite some time due to the recent crash of FTX.
0 Comments