Just In: Coinbase Customers Swap from Tether(USDT) to USDC with Zero-Fee Trades

Coinbase has asked users to switch from Tether (USDT) to its trusted and reputable stablecoin USDC.
USDT market cap has also fallen during the Terra-LUNA crash but remained stable near $65 billion while USDC declined below $50 billion.

United States-based cryptocurrency exchange, Coinbase asked its customers to convert TetherUSDT to stablecoin USDC which was founded by Coinbase in 2018. The platform has also exempted any fees on the conversion of USDT to USDC.

Coinbase further states that the stablecoin USDC is a trusted and reputable stablecoin and provides customers stability and confidence during times of volatility. What’s more, USDC is one of the most recognized Stablecoins since it is backed by “high-quality reserves,”

Tether (USDT) is a cryptocurrency stablecoin pegged to the U.S. dollar and backed 100% by Tether’s reserves. USDT also de-peg after the FTX collapse and traded below $0.95 against the US dollar.

On the premise of de-peging, during periods of market volatility, the trading price for USDT that is quoted on exchanges may fluctuate. This happens because there is more demand for liquidity than exists on that exchange’s order books and has nothing to do with Tether’s ability to hold its peg nor the value or makeup of its reserves.

Tether recently published its quarterly attestation on Nov. 10, just a day before FTX filed for bankruptcy. It is worth noting that 82% of Tether’s reserves are held in cash, cash equivalents, and other short-term deposits as of Sept. 30, 2022.

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

The exchange said in a blog post.

Coinbase indirectly attacked Tether (USDT) for its quality of reserves, however, there has always been some form of scrutiny around its reserves backing the stablecoins. A stablecoin, by definition, must be backed by 1 USD or equivalent.

On-chain data indicates that USDT is the third-most widely traded digital asset on Coinbase with a market capitalization of $42.8 billion, USDC is the industry’s second largest stablecoin behind USDT, which is valued at $65.7 billion.

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 push to accelerate global adoption follows reports that USDC’s market share is falling in part because of pressure from Binance, the crypto exchange that has been aggressively promoting its own stablecoin as an alternative to USDC.

The decision effectively banishes the second-largest stablecoin, USDC, from one of the most prominent perches in crypto, erecting an obstacle to overtaking tether (USDT) as the biggest one.