U.S. cryptocurrency exchange Coinbase encouraged its users to switch “to the trusted and reputable digital dollar, USDC,” referring to USD Coin (USDC), the stablecoin issued by Circle.
To make it easier for its users to switch to Circle’s USDC stablecoin, a cryptocurrency that Coinbase co-founded in 2018, the exchange offers commission-free exchanges for Tether (USDT). At the time of writing, USDT is the predominant stablecoin in its category, with 46.5% of the market.
In highlighting USDC’s strengths, Coinbase noted that it is “fully backed by high quality reserves”. It further detailed that these reserves are comprised of U.S. dollars in cash and U.S. Treasury bonds deposited with regulated financial institutions in the U.S. It further detailed that these reserves are comprised of U.S. dollars in cash and U.S. Treasury bonds deposited with regulated financial institutions in that country.
“Now more than ever, stability and confidence are of paramount importance to users,” the company emphasizes in its statement. As “in recent weeks some events put some stablecoins to the test,” Coinbase recommends the use of USDC, which is “always redeemable for U.S. dollars 1:1.”
However, Dan Burstein, chief compliance officer of Paxos (issuer of the Pax Dollar USDP stablecoin) challenged this claim recently, arguing that much of Tether and Circle’s holdings are mostly illiquid because they are “substantially for corporate debt obligations.”
Circle, the company that issues USDC, has had several major trading moves in recent months. On the one hand, the investment firm Black Rock invested USD 400 million in it.
On the other, it gained access to the Federal Reserve’s (Fed) reverse repo, a program that allows it to buy short-term Treasury bonds and then resell them at a higher price.
Previous Articles:
- Crypto.com proves its customer’s reserves
- Cuba and its blackouts could drive cryptocurrency mining on the island to extinction
- Decentraland allows you to rent your digital property
- Polygon prepares to host a Web3 music platform with Warner Music Group Involved In
- Fabio Panetta (ECB) on cryptos: gambling is the second oldest profession
