Coinbase ($COIN) wants its customers to strongly consider swapping any existing Tether ($USDT.X) for USD Coin ($USD.X).
A new post on the Coinbase blog titled “Switch to the trusted and reputable digital dollar: USDC” was posted on Thursday. With the following TL;DR (Too Long; Didn’t Read) summary:
“Tl;dr: USDC is one of the most trusted and reputable digital dollars, fully backed with high-quality reserves. Convert your USDT to USDC, now with zero fees.”
The post reinforces why Coinbase believes USDC is a safe stablecoin: it’s based in the U.S., is 100% backed by cash and short-dated U.S. Treasuries, is held in regulated institutions, and is audited by Grant Thornton LLP.
Tether has always been the ‘go-to’ U.S. Dollar based stablecoin for cryptocurrency trading, but its legitimacy and integrity have been questioned since its inception.
From questionable accounting practices to too-close-for-comfort partnerships with shady, non-U.S.-based derivative exchanges, Tether has always been controversial. And there are some clear signs that bigger exchanges are seeking to get away from it – Coinbase is just the latest.
In September 2022, the world’s biggest cryptocurrency exchange, Binance, announced and completed an automatic conversion of all other stablecoins (including USDT and USDC) into Binance’s own U.S. Dollar stablecoin, BUSD.
Tether has lost its peg against the dollar several times in 2022, and given all the other crises this year, it’s expected that other exchanges may turn to more transparent stablecoins. ☢️