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Coinbase asks users to switch from USDT to USDC at zero fees

Published

1 year ago

December 10, 2022

The US-based cryptocurrency exchange Coinbase has asked that its users convert their Tether-issued USDT to USDC.

In reaction to the recent happenings, the exchange believes USD Coin (USDC) is a reliable and trustworthy stablecoin. Therefore, it has also cancelled conversion fees for worldwide retail users switching from USDT to USDC.

According to Coinbase, USDC is unique since it is entirely backed by cash and short-term US Treasury securities held in US-licensed financial institutions. In addition, it assured its users that USDC would provide security through monthly attestations by Grant Thornton LLP, one of the biggest audit, tax, and advisory firms in the United States.

Stablecoins were initially developed as an introduction tool for cryptocurrency exchanges, but they have since evolved into a significant player in the market and a major source of liquidity. A stablecoin is required to be backed by 1 USD or an equivalent by definition.

In response to the announcement, Crypto Twitter expressed their doubts and displeasure towards Coinbase, asking its users to switch from USDT to USDC.

Gabor Gurbacs, a strategic consultant at VanEck, also reacted to the post, saying;

“Tether was the first stablecoin in the world and has been trusted by millions around the world since its inception. In fact if you ask people outside a narrow group in the US they’d pick tether over USDC.” With a market value of $42 billion, USDC is now the second-largest stablecoin by market share, following the Tether-issued USDT, which holds a market share of 65%. This new development will however be a boost for USDC considering the fact that in September, 2022 Binance did an automatic conversion of stablecoin Including USDC to BUSD.