Coinbase Calls For USDC Conversion: Tether’s Dominance To Be Tested?

Lavina Daryanani
Source: Bitcoinist

Prominent crypto exchange Coinbase has asked investors to switch to the “trusted and reputable digital dollar,” USDC. It emphasized that Circle’s native stablecoin was “fully backed with high-quality reserves.”

To encourage conversion, the exchange has made the process “frictionless.” A recent blogpost shared by the team announced that starting today, the exchange was waiving fees for global retail customers to convert USDT to USDC. Chalking out the essence of stability and trust, Coinbase noted,

“Now more than ever, stability and trust are of the utmost importance to customers. Fiat-backed stablecoins (cryptocurrencies pegged to reserve assets like the U.S. dollar) provide customers stability and confidence during times of volatility… We believe that USD Coin (USDC) is a trusted and reputable stablecoin.”

The exchange’s post further outlined that USDC was unique because it’s “100% backed by cash and short-dated U.S. treasuries held in U.S. regulated financial institutions.” It also highlighted that the stablecoin was “always” redeemable 1:1 for U.S. dollars.

Binance Said UNO Reverse

In September, Changpeng Zhao-led exchange Binance announced that it would halt trading support for USDC, along with two other stablecoins. Post the cut-off date, users’ assets were auto-converted to Binance’s BUSD. The exchange noted that this was done to spruce up liquidity and capital efficiency for its customers.

Tether [USDT] was, however, left out of the equation. The exchange affirmed that there were no plans to auto-convert USDT to BUSD.

Is Circle’s USDC Challenging Tether’s Dominance?

Per data from CMC, the aggregate value of all USD Coins stood at around $43.1 billion. Currently, however, it’s down to $42.78 billion. USDT’s number, on the other hand, rose in the same period. On December 2, the total valuation of USDT tokens was around $65.37 billion. However, now, it is already up to $65.7 billion.

Source: CMC

The magnitude of increase and decrease is nearly the same, hinting towards the possible fund shuffling from USDC to USDT by investors. In fact, data from Messari also brought to light that Tether’s market cap dominance rose from 7.5% to 7.65%, further assuring that the market’s largest stablecoin continues to remain in the driver’s seat.