Cryptocurrency exchange Coinbase has urged its consumers to ditch Tether’s USDT and move onto the stablecoin alternative.
This transaction will cost no fees, the exchange assured, and published a blog post in which it explained that certain stablecoins were under threat because of the collapse of rival FTX.
USDT showed small fluctuations in the wake of the FTX collapse, losing its one-for-one peg to the US dollar and putting the liquidity and sustainability of the coin in question.
However, not everyone is happy with the suggestion. One user suggested that Tether was the most trusted stablecoin currency and that USDC was a niche alternative that fewer people trust.
However, Coinbase insisted that the move is necessary to ensure that there are no lingering risks to people’s funds.
Stablecoin collapses have long been tied to a doomsday scenario for cryptocurrencies when even the one-for-one peg of a stablecoin could not be trusted, triggering further slides.
Tether was naturally not happy with the announcement and said that Coinbase’s actions were “wildly inappropriate” suggesting that driving investors to drop an asset that had been performing well enough was irresponsible. Tether also added that USDC was not a true rival to USDT in any capacity.
However, the numbers tell a different story. In August, USDC stood at $53.9bn and almost caught up to Tether’s $63.3bn.
However, USDC has since fallen back to low-$40bn territory. USDC is not necessarily enjoying that much trust by some of the big names either.
Binance, yet another exchange, decided to convert all of its USDC holdings into BUSD, the company’s proprietary stablecoin token seeing it as a safer long-term bet.