Through a press release, Coinbase announced that swaps of USDT from Tether to USDC from Circle will now be free of charge on its platform. She also touted her stablecoin to promote its stability and security. An admission of weakness, considering USDC’s large market cap loss of late?
Coinbase highlights its USDC
Coinbaseone of the largest exchanges in the world, released a statement dated December 8 tricking its users into ditching their USDT stablecoins in favor of USDC.
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
Through this same press release, Coinbase announces that its users will now be able to swap their USDT for USDC without any fees. An aggressive marketing move, but motivated, according to Coinbase, by a concern for “stability and trust”. Also we can read:
” […] The events of the past few weeks have put some stablecoins to the test and we have seen a flight to safety. We believe that USD Coin (USDC) is a trusted and reputable stablecoin. […] We will continue to work to provide our customers with safe and responsible ways to hold and grow their cryptos. »
Stablecoins are cryptocurrencies whose role is to follow the price of a stable asset such as the US dollar or the euro in order to bring stability to their holders and to the market. To learn more about these key cryptocurrencies, read our page dedicated to stablecoins.
According to the exchange, USDC is backed at a 1:1 ratio by cash and short-term US Treasury billsboth held in regulated financial institutions, all audited monthly by Grant Thornton LLP.
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A sign of panic for Coinbase?
First of all, remember that Coinbase is closely linked to the USDC. Indeed, the exchange itself is behind CENTER, the consortium to which Circle, the USDC issuing company, belongs. Also, such an effort to highlight its USDC appears to some as an admission of weakness :
Not a good look. Also looks desperate.
Makes me trust USDC a little less tbh.
— Byzantine General (@ByzGeneral) December 9, 2022
“It doesn’t smell good. And it looks hopeless. It gives me a little less confidence in USDC, to be honest. »
This announcement should be put into perspective with various news that have arisen in recent times which may have had a deleterious effect on the USDC. First, Binance announced in September that USDC sent to its platform would automatically be transformed into BUSD, its own stablecoin. which continues to gain ground in this section of the market.
Also at this time, Circle had frozen wallet addresses linked to Tornado Cash without even being ordered to do so by the authorities, which had, for some, revealed a certain zeal of the company.
At the same time, Tether, the USDT issuing company, made a 90 degree turn in order to increase its transparency as much as possibleincluding hiring one of the largest auditing firms in the world and completely scrapping its share of commercial paper aimed at insuring USDT.
Sharing the total circulating supply of stablecoins, with USDC (in blue), USDT (in red) and BUSD (in green)
Indeed, Circle’s USDC has suffered severely from these events, its market capitalization dropping from just over $56 billion in July to $42 billion currently. a decrease of $14 billion.
Over the same period, Tether’s USDT capitalization grew from $72 billion to $65 billion, a decrease of $7 billion.
Market capitalization of USDC (left) and USDT (right)
The historical conflict between the 2 stablecoins therefore continuesbut Binance’s BUSD, while low-key, remains one to watch given its growing role within the stablecoin market.
👉 Read also – Binance audit: the Bitcoin (BTC) held by the platform is overcollateralized
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Published by Editions Larousse
Sources: Coinbase, The Block, CoinGecko
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Passionate about the world of decentralized finance and the novelties brought by Web 3.0, I write articles for Cryptoast to help make the blockchain more accessible to everyone. Convinced that cryptocurrencies will change the future very soon.
Maximilien Prue
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