Tether is in a state of disarray, with the probe by the New York Attorney General and market fears of its liquidity in constant doubt. This has given competitors in the stablecoin market to jump into the hole that has been left by these events and Coinbase, it seems, is first off the mark.
USDC expansion looking to kill USDT
Coinbase is looking to expound on USDT’s troubles with a rapid expansion into 85 countries that will see the popular US-based cryptocurrency exchange double down on its investment in USDC and try to pull in market leadership.
People who have been looking to buy tether are not going to be offered a different, and some would say more stable option, that is backed by Coinbase. It is telling that Coinbase does not support USDT at all and is looking to force other exchanges to drop the ailing cryptocurrency for its own coin. The timing is perfect for Coinbase and terrible for USDT. It is a given that USDT has been seen as crucial to liquidity when cryptocurrency markets are feeling stress. The troubles surrounding the coin have shown that the cryptocurrency market’s foundations are not that strong – something USDC will be looking to remedy.
The benefits USDC will bring to cryptocurrency markets is immense, as it is a well regulated, well funded and particularly large operation. They are not shying away from the bloodthirstiness of their move either with their press release explaining exactly what the thinking behind the move.
“Unlike other cryptocurrencies, each USDC is backed by $1 USD with monthly transparency audits showing 100% USD backing. There are more than 300 million USD Coins in circulation today, supported by +100 ecosystem supporters. For these reasons, we see USDC as an important step towards a more open financial system.”
The emphasis on monthly audits and transparency within the operation, not to mention the phrase “unlike other cryptocurrencies” which is a swipe that is directed squarely at USDT seems to point to Coinbase preparing for all-out war for the hearts and minds of anyone who wants to trade crypto.
Slam dunk for Coinbase and Circle
The two partners involved in USDC seem to have hit a slam dunk, while the Tether backers will be drawing the short straw soon enough. Tether recently became a multi-blockchain stablecoin by moving a portion of its assets to the Tron platform.
This has helped anyone who wants to buy Tron (TRX) and use it to trade in other cryptocurrencies a safe haven when times get tough. While some think that the move might help stave off the vultures, for the time being, no one in the industry is in any doubt as to who the eventual winner will be now that Coinbase has shown its hand.
The only way that Tether can continue to compete with USDC from here on it is for one of two things to happen. It must either show that it has fully backed its coins with real money which is unlikely due to news from the past two weeks. The other option is that the US government clears it of all charges, which is looking less and less likely every day.