Coinbase asks users to switch USDT for the ‘reputable’ USDC

Crypto exchange Coinbase wants its users to switch their USDT for USDC.
The company calls USDC the trusted and reputable stablecoin.
Coinbase is a co-founder of Circle, the company that issues the USDC stablecoin.

Coinbase wants users to adopt USDC

Coinbase, one of the leading crypto exchanges in the world, has urged its users to swap their USDT stablecoin for USDC. USDT is the leading stablecoin in the world (with a $65 billion market cap) and is issued by Tether.

Meanwhile, USDC is the stablecoin issued by Circle, a company that Coinbase helped founded. In a blog post on December 8th, Coinbase said USDC is the more trusted and reputable stablecoin. Coinbase wrote,

“We co-founded USDC in 2018 with the vision of creating a more open, global financial system. 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. Customers are calling for transparency, and USDC delivers via monthly attestations by Grant Thornton LLP, one of America’s largest audit, tax, and advisory firms. Plus, eligible customers globally² earn up to 1.5% APY³ on their USDC holdings with Coinbase.”

Recent events prompted Coinbase to favour USDC

Coinbase explained that events of the past few weeks prompted it to ask its users to switch to USSC. On-chain data indicated that USDT briefly lost its peg against the US Dollars following the FTX collapse. Coinbase wrote that;

“However, 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, so we’re making it more frictionless to switch: starting today, we’re waiving fees for global retail customers to convert USDT to USDC.”

Although USDT remains the leading stablecoin in the cryptocurrency space, it has encountered numerous controversies over the years. There were claims that Tether’s USDT stablecoins were not fully backed.

In September, the stablecoin issuer was ordered by a U.S. judge in New York to produce financial records associated with the backing of USDT. In 2020, the New York Attorney General’s office filed a lawsuit to get Tether to release documents regarding its finances.