Stablecoins are the name of the game in the crypto industry.
Each exchange is pushing its version of a fiat-pegged coin with many local exchanges doing the same on national levels issuing coins backed by local fiat currencies. However, the real battle is happening between behemoths of the market like Coinbase, Binance, and Tether.
The market may face a problem of too many choices
Even Cardano is planning to issue their stablecoin sometime in 2023 with the most likely date being close to Q1 of 2023. We will see many coins that are theoretically tied to fiat currencies meaning higher trading volumes and better accessibility of the market.
In a fair competition, stablecoins with the best price, solvency, liquidity, and availability would win the race.
However, we are dealing with an intensely competitive industry with each participant trying to isolate its share of the market and grow it as much as possible using all the gray tricks they have. Whether you are in favor of such fierce competition or not is a completely different question.
Coinbase is completely removing fees associated with using USDC on the platform and encouraging its users to switch their holdings from USDT to USDC.
The official reasoning is that the events of the past several weeks made it clear that safety is the number 1 priority for many crypto users. Coinbase believes that USDC is a better choice in this regard.
It is a big move from Coinbase considering that Tether is the third-biggest asset traded on the platform. However, USDT did temporarily lose some of its value following the FTX collapse.
The whole market is doing it
Binance is also known for making comments about the stability and reliability of stablecoins issued by Tether and some other entities.
Binance also made it clear that they believe in their stablecoin BUSD which is heavily promoted on the biggest crypto exchange. Notably, the support for USDC was stopped citing the same safety concerns. All USDC holdings of users of the platform were automatically converted to BUSD.