As Vice President of Corporate and Business Development at Coinbase, Emilie Choi puts it, a stablecoin is a “digital programmable dollar” and let’s be honest, the leading stablecoin, Tether hasn’t had a good few weeks. Given the scandal with Bitfinex, there is a hole for a competitor to come out and take over the stablecoin space.
It now seems that one of the biggest exchanges in the industry, Coinbase is going to try and be the one to take out Tether.
Just to add insult to injury to Tether’s troubles, Coinbase is going to expand the trading on USD Coin into 85 countries.
This is a very bold move by the US exchange and the timing for Tether couldn’t get much worse to be honest.
With Coinbase being a giant in the crypto space, one that is well-funded and a trusted brand (depending on your viewpoint), this is a big rival to Tether. USD Coin would be devoid of the kind of questions that Bitfinex and Tether are facing.
The exchange highlighted exactly what they are planning in a blog post:
“Unlike other cryptocurrencies, each USDC is backed by $1 USD with monthly transparency audits showing 100% USD backing. There are more than 300 million USD Coins in circulation today, supported by +100 ecosystem supporters. For these reasons, we see USDC as an important step towards a more open financial system.”
We all know that Tether hasn’t been very successful in providing real transparency and it seems Coinbase know this too.
Coinbase is able to provide a well-needed service with this stablecoin. It wouldn’t just improve upon what Teher offers but it would help expand and at a good time too.
As reported by CCN:
“Chaos is always an opportunity for someone, and with USD Coin, Coinbase isn’t going to let this one pass them by. While there are plenty of other stablecoins, capital and brand recognition come with USDC.”
In the long term, it is difficult to see how Tether will compete unless they can both prove they are close to the requisite funds to back the coin or wait until the US government clears them fully.
Neither of these outcomes are very likely.