Coinbase, the largest cryptocurrency exchange in the United States, has fired the latest salvo in the stablecoin wars, urging crypto holders to ditch Tether USD (USDT) for USD Coin (USDC) even as allegations of Alameda attacking Tether just before bankruptcy came to light.
“Fiat-backed stablecoins […] provide customers stability and confidence during times of volatility,” they wrote in a blog post. “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.”
Coinbase co-founded USDC in 2018. “USDC is unique in that it’s 100% backed by cash and short-dated U.S. treasuries held in U.S. regulated financial institutions,” they wrote, adding that the stablecoin is “always redeemable 1:1 for U.S. dollars.”
“Customers are calling for transparency,” Coinbase said, “and USDC delivers via monthly attestations by Grant Thornton LLP, one of America’s largest audit, tax, and advisory firms.”
The sales pitch for USDC is written to target the specific concerns that market participants have long held about USDT. Tether USD was the earliest stablecoin to be widely adopted by market participants, and it ranks first among stablecoins and number three among all cryptocurrencies with $66 billion in market share. But the secretive nature of its control and the lack of visibility into its reserves have long been a sore spot within the crypto community.
The collapse of FTX, which was caused in part by customers’ accounts being backed by lower-quality collateral than expected, has further highlighted these concerns and is pushing people to consider swapping their USDT for USDC.
USDC is the second largest stablecoin with a market cap of roughly $42.85 billion. Binance USD (BUSD) is the third-ranked stablecoin on the market with 22.1 billion tokens in circulation.
On Friday, a report was published which claimed that the day before FTX filed for bankruptcy, Binance’s founder Changpeng Zhao accused former FTX CEO Sam Bankman-Fried of using sister firm Alameda Research to attempt to depeg USDT from its 1:1 U.S. dollar valuation.
post-strike FTX scoop: Just before the bankruptcy, @cz_binance accused @SBF_FTX of trying to drive down the price of Tether. They traded barbs in a group chat with other crypto execs. “The more damage you do now, the more jail time,” CZ said. https://t.co/OTlYgoEruJ
— David Yaffe-Bellany (@yaffebellany) December 9, 2022
The accusation was made in an exclusive group chat that included some of the highest-level executives in the crypto ecosystem, among them Kraken founder Jesse Powell and Paolo Ardoino, Tether’s Chief Technology Officer.
SBF confirmed Friday that he will indeed testify at next week’s congressional hearing into the collapse of FTX, and CZ has also been asked to testify at some point. With such high-profile personalities speaking under oath, and with new allegations seemingly emerging every day, the Dec. 13 hearing has the potential to move crypto markets the way central bankers’ comments move the broader markets.
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Read More:Coinbase incentivizes customers to dump USDT for USDC as new allegations of SBF stablecoin manipulation emerge
2022-12-09 21:28:00