- Coinbase, a co-founder of USD Coin, is waiving fees for customers to exchange Tether for USDC.
- On-chain data reveals that USDT is the third most widely traded crypto on Coinbase and accounts for 5% of trade volume on its exchange.
- Tether suffered a depeg and traded as low as 93 cents post FTX exchange fallout, raising concern among traders and crypto firms.
Coinbase, one of the largest cryptocurrency exchanges and a co-founder of USD Coin (USDC) has urged traders on its platform to exchange USDT to USDC, offering the transfer for free. The move is seen as part of a ‘stablecoin war’ between rival platforms, and comes after Binance International recently delisted USDC trading pairs. The latest move by Coinbase has been read as exchanges ‘picking sides’ among the competing stablecoins USDC and USDT.
Also read: SEC order attempts to assess health of crypto industry after FTX exchange fallout
Coinbase and Binance pick sides in rivalry among USDC and USDT
Coinbase and Binance, two of the world’s largest cryptocurrency exchanges recently picked sides between competing stablecoins USD Coin (USDC) and USD Tether (USDT). Both stablecoins are pegged 1:1 to the value of the US Dollar.
Binance International recently delisted USDC trading pairs, a stablecoin co-founded by Coinbase. This was considered a hostile move by the exchange famed for joining the dots behind FTX exchange’s collapse and bankruptcy. Back in November, Binance’s announcement of its decision to sell FTX exchange’s native token FTT triggered a massive crash in the crypto, and caused Samuel Bankman-Fried’s (SBF) crypto platform a crushing liquidity crisis.
Post the FTX bankruptcy, stablecoin Tether, Circle – the issuer of USDC, and Coinbase denied exposure. The rivalry between the two stablecoins USDC and USDT stems from the fact they are owned by different exchanges.USDC is affiliated to Coinbase though it is issued by stablecoin developer Circle. USDT is affiliated to rival exchange Bitfinex whilstTether Limited is actually owned by Hong Kong-based iFinex Inc., which also owns the Bitfinex cryptocurrency exchange.
The three cryptocurrency exchange platforms, Binance, Coinbase and Bitfinex are competitors. Their affiliation with the stablecoins they back has intensified the rivalry and divided traders in the crypto community.
Binance auto converted USDC into its stablecoin BUSD, hurting USDC circulation
Circle, the issuer of USD-pegged stablecoin USDC, recently issued a statement citing strong competition in the stablecoin market and the increasing pressure on its crypto asset. Circle expects USDC’s growth to be slowed down by the recent changes in crypto.
In a filing to the US Securities and Exchange Commission, Circle said on November 14 that crypto exchange Binance’s auto conversion of USDC into Binance’s stablecoin (BUSD) held in the platform’s wallets has reduced USDC circulation in the quarter ended September 30.
#Binance to Auto-Convert $USDC, $USDP, $TUSD to #BUSD (Binance USD).
— Binance (@binance) September 5, 2022