The crypto winter is getting worse, with the market struggling to recover from a string of shocks since the beginning of this financial year. In a wide spectrum, it seems chaotic and every other crypto asset and crypto firm is finding it difficult to find a way out of it. Prominent crypto exchange Coinbase recently announced an offer to swap USDT stablecoin for USDC over the platform.
Coinbase Offers to Swap USDT for USDC
Coinbase stands as the second largest crypto exchange in terms of trading volume and its move is inferred as the beginning of a new tussle in the stablecoin space. It is providing zero-fee trades intended to encourage users to exchange their USDT holdings for the USDC stablecoin.
Issued by Tether, the stablecoin USDT holds the top position among stablecoins with a market cap of more than 65.7 billion USD. USDC, trailing behind USDT, has second spot in terms of dominance across the stablecoin market with an overall market cap of over 42.7 billion USD.
The move to offer zero-fee trades was not welcomed by the market. Many cited Coinbase’s ties with the USDC issuer Circle and its own contribution for the development of the stablecoin as the motive behind the swap offering.
In its blog post, Coinbase mentioned that the events which took place in the past several weeks have tested the resilience of stablecoins. They prove to be the ‘flight to safety’ during these beleaguered situations. It underscored their belief in USDC as ‘a trusted and reputable stablecoin.’
Crypto Community Not Buying the Idea
Coinbase went on to post the announcement on Twitter on December 9th: “Switch to a trusted stablecoin: USD Coin (USDC). Now convert Tether (USDT) to USDC with zero fees.”
Soon after the post was shared, many Twitter users erupted over the social media platform and called out Coinbase for the recent action. A Twitter user going by the name “Samson Mow” replied to the post warning to beware of the companies offering free stuff. He said the door letting you in is usually big, but the door out of it is relatively small.
Another user called “Satoshi Otomakan” went sarcastic while asking if Coinbase is doing a favor to him by accepting his USDT and giving back USDC stablecoin without charging any fees. He further added that he felt the crypto exchange wants to take all of his USDT and give him ‘crap USDC.’
Looking from the broader perspective, it doesn’t make sense to offer to swap a major stablecoin in exchange for an asset with relatively less dominance. Additionally, USDT is the biggest stablecoin with the most trading volume across the crypto space. Earlier, USD was reported to have lost support from major crypto exchanges along with USDP and TUSD.
Source: https://www.thecoinrepublic.com/2022/12/10/crypto-community-seems-to-reject-coinbases-free-usdt-usdc-swap-proposal/