Amid increasing doubts surrounding Tether’s USDT, Coinbase is encouraging its users to switch to the USDC, its own stablecoin, by eliminating conversion costs.
The company has launched a campaign to highlight the quality of reserves backing the Circle-owned USD Coin (USDC).
According to Friday’s blog post, Coinbase is making the switch to USDC “frictionless” as a result of the recent events that have caused investors to seek out a more reliable stablecoin.
“We believe that USD Coin (USDC) is a trusted and reputable Stablecoin, so we’re making it more frictionless to switch,” the firm said.
Coinbase has noted the high value of USDC’s stability and trust for customers, citing its increased market share over the past couple of years in comparison to USDT.
The exchange further highlighted that one of the US’s top audit, tax, and advisory firms, Grant Thornton LLP, provides monthly attestations to show USDC’s transparency.
They have also stated that USDC is “100% backed by cash and short-dated U.S. treasuries held in U.S. regulated financial institutions.”
Data from the blockchain suggests that USDT is the third most widely exchanged digital asset on Coinbase, representing 5% of the platform’s total volume.
Despite the lack of a full audit of its reserves, the issuer of the Stablecoin insists that its holdings are fully backed up.
Reports that Tether had loaned out its own currencies to customers, leading to a lack of sufficient liquid assets to support the token under pressure, triggered a rebuttal from the issuer.
Tether quickly released a blog post to dispute these allegations, stating that the claims were based on many misunderstandings of Tether and USDT.