Coinbase strikes Tether in the ‘stablecoin wars’

    12 Dec 2022

    Coinbase has called on users to convert their Tether (USDT) stablecoins to USDC – the stablecoin it co-founded – with zeroing exchange fees. The move follows a battle of words between Tether and some media outlets.

    “Now more than ever, stability and trust are of the utmost importance to customers,” Coinbase stated in an official blog post, adding that the ability to free swap USDT to USDC represents a continued effort to give users “safe, responsible ways to hold and grow their crypto.”

    Coinbase reiterated that USDC stablecoin is “unique in that it’s 100% backed by cash and short-dated US treasuries held in US-regulated financial institutions.” The exchange added that its associated stablecoin delivers monthly attestations and is “always redeemable 1:1 for US dollars.”

    This Coinbase’s move is another shot at USDT in the so-called “stablecoin wars.”

    Earlier, The WSJ published a report on Dec. 1 that claimed the company behind Tether “may not have enough liquid assets to pay redemptions in a crisis.” That assessment came from an apparent increase in loans, as opposed to direct sales.

    In response, Tether published an ironic blog post entitled: “WSJ & CO: The Hypocrisy of Mainstream Media, Asleep at the Wheel of Information.”

    “Critics and media outlets have spent years criticizing, investigating, and warning against the purported ‘ever impending’ failure of Tether, yet they were completely asleep at the wheel as a hugely significant portion of the crypto industry imploded due to irresponsible leverage, outright fraud, and regulatory arbitrage,” Tether said.

    Also, Tether listed crashed crypto exchange FTX, its subsidiary Alameda Research and crypto lender BlockFi, as well as embattled hedge fund Genesis, lender Celsius, crashed hedge fund Three Arrows Capital, and the collapsed Terra project as “a few” examples that Tether skeptics had ignored.

    Meanwhile, Circle’s USDC has a current circulating supply of $43.8 billion, while Tether’s USDT has a circulation of $65.7 billion, according to their websites.

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