Coinbase urges users to abandon Tether

The largest US crypto exchange Coinbase does not want its customers to use the Tether stablecoin. Instead, the company proposes to promote its own stablecoin, USD Coin (USDC).

In a post on the crypto exchange’s blog on December 8, Coinbase urged its customers to «switch to the authoritative digital dollar: USDC». Representatives of the exchange added that USDC is one of the most reliable stablecoins, fully backed by «high-quality reserves.» Coinbase has now initiated commission-free transfers between USDT and USDC to encourage customers to choose the crypto exchange’s stablecoin as an asset.

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 events of the past few weeks have tested some stablecoins. We have seen a return to quality,» the statement said. Representatives of the exchange emphasized that stability and trust are now key for Coinbase customers. They are achieved through confidence in the provision of stablecoin reserves — USDC is 100% backed by cash and short-term US Treasury bonds held in regulated financial institutions.

According to CoinGecko, USDC Coin, with a market capitalization of $ 42.8 billion, is the second largest stablecoin after Tether with a market cap of $ 65.7 billion. USDC Coin’s daily trading volume is currently $ 1.96 billion, while Tether’s is $ 28 billion.

As a reminder, Mad Money host Jim Cramer criticized the Tether stablecoin (USDT) due to the «inflated» market capitalization of the virtual coin: «Thecapitalization of the Tether stablecoin is still $ 65 billion. There is a whole industry of cryptocurrency hype mongers who are desperately trying to keep them alive.» The financial media outlet advised cryptocurrency holders to get rid of their assets due to the collapse that is looming in the industry in 2023.

It should be noted that on September 29, the cryptocurrency exchange Binance stopped supporting competitive stablecoins, including USDC. The exchange stopped supporting currency pairs such as USDC/BUSD, USDC/USDT, USDP/BUSD, and automatically converts any user balances to BUSD.