Coinbase (NASDAQ:COIN), the top crypto exchange in the US, has posted a statement telling customers to migrate from Tether – USDT, to USDC – the dollar-based stablecoin issued by Circle. In the post’s headline, Coinbase calls USDC “trusted and reputable,” insinuating that Tether is, well, not so much.
Coinbase has a vested interest in USDC as it was a key participant in the partnership that launched USDC in 2018. Coinbase states:
“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 globally earn up to 1.5% APY on their USDC holdings with Coinbase.”
Coinbase has simplified the migration from Tether to USDC by incorporating a button for USDT holders to complete the migration with a single click.
Coinbase says that recent events have “put some stablecoins to the test” and they have seen a “flight to safety,” and this is why they are streamlining the transfer to USDC.
Currently, USDT is the leading dollar-based stablecoin in the world. At the same time, USDC has been making headway in its ambition to usurp Tether – which has taken pains to deflect critics that worry it is not fully backed by reserves. Over time, Tether has been migrating reserves away from Commercial Paper to US Treasuries – thus reducing risk for the stablecoin. Another issue Tether recently countered, were claims of leveraged stablecoin loans.