The second largest crypto exchange by volume, Coinbase, is encouraging its users to swap from USDT to USDC with fee-less trades.
Coinbase has begun waiving fees for global retail customers who wish to switch to a “trusted stablecoin” in the aftermath of the FTX collapse. Reportedly, Tether (USDT) was knocked off its peg and traded much below 93 cents soon after FTX went into an abrupt meltdown.
Coinbase stated in a blog, “The events of the past few weeks have put some stablecoins to the test and we’ve seen a flight to safety.” The exchange emphasized, “We believe that USD Coin (USDC) is a trusted and reputable stablecoin.”
Coinbase, which co-founded USDC in 2018 said, “USDC is unique in that it’s 100% backed by cash and short-dated U.S. treasuries held in U.S. regulated financial institutions. It’s always redeemable 1:1 for U.S. dollars.”
On-chain data shows that USDT represents 5% of the volume on the exchange and is trading for 99 cents at the time of writing. Currently, USDT is the third-most widely traded digital asset on Coinbase.
The majority of trading pairs on exchanges have returned to $1 but as per CoinGecko, USDT will continue to trade at 99 cents on some pairs of Binance.
The latest move from Coinbase was a shot at rival stablecoin Tether which is the largest stablecoin in crypto with a market capitalization of $65 billion. Well, the recent announcement would surely stir a stablecoin supremacy war. Undoubtedly, exchanges will be seen taking sides in the competition for stablecoin dominance.
Last week, Tether hit back at media FUD regarding rising loan risk. It said in its blog post about how mainstream media has failed in predicting the demise of major crypto platforms that kept on targeting Tether.
Tether that issues USDT has faced scrutiny over the reserves backing its stablecoin. With the announcement emphasizing the importance of stability and trust while also waiving fees to swap from USDT to USDC, Coinbase is clearly voicing its concern.
