Coinbase has waived conversion fees to try and induce customers to switch from USDT to USDC. Meanwhile, Binance has delisted USDC trading pairs and is pushing its own BUSD stablecoin.
Cryptocurrency exchanges Coinbase and Binance have recently been at the centre of the so-called “stablecoin wars.” Coinbase has asked its users to switch their US Dollar Tether (USDT) holdings to USDC, while Binance has chosen to stick with USDT and its own BUSD.
For traders, this could have implications for their portfolio as each stablecoin has different features and characteristics. Coinbase is encouraging its users to move their funds from USDT to USDC, a US dollar-backed stablecoin.
USDC is an Ethereum-based token that is backed by a US dollar reserve, and it is administered by the CENTRE Consortium. USDC is designed to be a more transparent and cost-effective alternative to USDT, as Coinbase claims that USDC is more regularly audited than USDT. Coinbase has also introduced a feature that allows users to easily convert their USDT to USDC.
Binance, on the other hand, has chosen to remain loyal to USDT. USDT is a stablecoin that is pegged to the US dollar and is issued by Tether Limited. USDT currently holds the largest market share of the stablecoin market and is used by many traders as a way to store and transfer value.
USDT has come under fire in the past due to its lack of transparency and audits, but the coin has been able to stay afloat due to its large user base.
For traders, the choice between USDC and USDT can be a tricky one. USDC is more transparent than USDT and is backed by a reserve, but it is also more expensive to use. USDT is more widely used, but it is not as secure or transparent as USDC. Ultimately, the decision between the two coins boils down to personal preference and the specific requirements of each trader.
Which stablecoin will dominate?
In conclusion, Coinbase and Binance have taken sides in the stablecoin wars, and traders should be aware of the differences between USDC and USDT when making their decision.
With stablecoin regulation fast approaching, it will be interesting to see which of the stablecoins might rise to prominence and unseat USDT as the main way to transact between cryptocurrency and the US dollar.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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