You can very often observe fresh waves of releases and trends in the Crypto space. There will always be some amusing news happening around this market that will attract your interest. Now the recent break in the market is coming from Coinbase.
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This reputable exchange is now asking its users to shift to USDC, their stablecoin. Rather than opting for Tether or USDT, they are promoting their users to switch to their coin.
But what is the reason behind this encouragement? Read this blog if you want to find out the real reason behind this situation. Also, learn what you should do in this stance!
The Highlights Of This Case
The well-known CEX has shared in one of its recent blogs, encouraging all its users to choose USDC. For this, they are cutting down their conversion fees. Also, the firm is highlighting this token to be a reliable and trustworthy digital dollar!
There is an ongoing stablecoin war in the Crypto industry. And as a result of this clash, Coinbase is taking this position. Almost all the exchanges are coming forth to support their native tokens, stablecoins in particular!
You can see a similar case occurring in Binance. This exchange is no longer supporting USDC. But this firm is extending its support towards its stablecoin, BUSD! While this coin is out of Binance now, other firms are also looking for new ways to attack UDC’s growth.
Coinbase Is Asking To Abandon Tether
Coinbase along with the help of its partner firm, Circle, are the founders of USDC. Besides that, Coinbase also offers attestations of Grant Thornton LLP, each month. This is the largest tax, audit, and advisory company in the US.
But, Tether is now revolving around different controversies. This is so because the company that generates full audit issues USDT. Also, the firm dismisses the FUDs by stating that it has a full backup of all its reserves.
But, USDC is its rival coin and manages to avoid all the scrutiny as well. This coin is now one of the top competitors of USDT, which is the market leader. For the last four years, USDT has held its position as a market leader in terms of stablecoins.
Tether has a total market capitalization of around 65.7 billion USD. While USDC stands in the second position with an amount of 42.7 billion USD!
FTX Collapse Leads More Investors To Question Stablecoins
With the FTX crash and loss of huge amounts of funds, investors are questioning the safety of stablecoin as well! They are feeling it riskier to invest in stablecoin too, which is otherwise considered the safest option.
In this aspect, Coinbase glorifies its stablecoin and states that it is safe to use. The firm also mentions that they believe USDC is a reputable and trustworthy option. So, they are making the shifting options easier for their users. For this, they are waiving the fees for investors to shift to USDC!
Coinbase Faces A Vicious Year
This year has not been the best for Coinbase. This latest update of waiving fees on transactions is indeed a negative aspect for this firm. Because Coinbase gets the majority of its revenue from transaction fees. And, with the recent announcement, it is going to lose its major revenue source too!
Apart from this, the ongoing bearish phase of the market is adding more to their bad times. Due to the bearish phase, Coinbase has to go through a fall of about 50% in its revenue.
If you compare the trading revenue of this firm with that of the previous year, you can notice the declining condition.
The CEO of Coinbase stated this decline in an interview with Bloomberg. Brian Armstrong, the CEO of Coinbase highlighted in that interview that they generated revenue worth around 7 billion USD in 2021. And in 2022, it was less than half!
Conclusion
Coinbase comes around with the decision of supporting its token USDC. And this, they are asking their users to buy USDC alone!
But, this move may prove to be a wrong one for the firm. Because, to encourage more people into buying USDC, Coinbase is cutting down the transaction charges, their main revenue source. And, to get a fair idea of Cryptocurrency trading visit, Bitcoin smart.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect those of Geek Vibes Nation. This article is for educational purposes only.
Caroline is doing her graduation in IT from the University of South California but keens to work as a freelance blogger. She loves to write on the latest information about IoT, technology, and business. She has innovative ideas and shares her experience with her readers.
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