Tether CTO Paolo Ardoino denounced the decision, along with several Twitter users who have questioned the motive.
Coinbase has announced zero conversion fees for customers wanting to change to a popular stablecoin USDT in a new drive that emphasized the quality of reserves that support Circle-owned USD Coin (USDC).
According to a Coinbase blog post, affairs in the previous week have led to the assessment of some stablecoins while also witnessing a flight to safety. It went on to claim that USDC was considered a reputable and trustworthy stablecoin.
Coinbase has waived the fees for international retail customers to convert USDT to USDC. Coinbase also happened to be the co-founder of USDC. Statistics show that USDT is the third-most widely traded virtual currency on Coinbase, making up for five percent of the entire volume on the exchange, where it presently trades for ninety-nine cents.
Recently in September, Tether was also commanded by the US judiciary in New York to present financial documents that prove the backing of USDT. This is different from the lawsuit in the New York Supreme Court that is requesting for the New York Attorney General to disclose papers it has collected for the inquiry into Tether’s reserves. Binance, on the other hand, has also discontinued allowing USDC and is auto-converting customer holdings into its own stablecoin BUSD.
Coinbase is presently the second largest exchange by volume, with more than $1 billion in transactions completed on December 8.
With a market capitalization of $65 ibllion, USDT is the largest stablecoin in crypto. At $42 billion, USDC is the second largest. Since its establishment, Tether has witnessed massive criticism over the reserves supporting its stablecoin. With Coinbase’s announcement highlighting the necessity of trust while simultaneously enabling a one-way free-of-cost switch from USDT to USDC, the company is also capitalizing on the doubts that surround the Tether community.
USDC is driven by a powerful consortium known as Centre, of which Coinbase is the founding member. Circle, which is also a member of the Centre and a leading enterprise to account for the operations in USDC, deserted its plans to go public by way of a special purpose acquisition vehicle (SPAC).
Exchanges are essentially taking one or the other side in the rivalry for stablecoin monopoly in the market. In September, Binance, which is the world’s largest crypto exchange started to convert users’ stablecoins into their own BUSD currency.
Coinbase has, with this move, indirectly slammed Tether for its quality of reserves which had acutely depeg during an unstable market scenario. In retaliation to the action, Tether CTO Paolo Ardoino denounced the decision, along with several Twitter users who have questioned the motive.