Coinbase proposes to switch USDT to USDC with no fees

U.S. crypto exchange and co-founder of USDC, Coinbase, urges its customers to switch USDT to the trusted and reputable USDC with zero fees.

In the official announcement from Dec. 8, the company states:

At Coinbase, we’re focused on stability and trust. Today’s announcement represents one step on that journey – enabling global customers to convert USDT to USDC with no fees. We’ll keep working to give our customers safe, responsible ways to hold and grow their crypto.

Coinbase points out that the exchange is committed to safety and transparency in the crypto industry during difficult times. With 1:1 backing from cash and short-dated U.S. government bonds, the USDC stablecoin guarantees the safety of funds.

With Coinbase’s commitment to USDC, it goes further to frictionally switch USDT to USDC with no fees:

To convert USDT to USDC, find your USDT holdings on the Assets tab of www.coinbase.com or your Coinbase mobile app. Tap Trade, then tap Convert. Enter the amount of USDT you’d like to convert and select USDC as the asset.

Coinbase derives most of its revenue from transaction fees, which are well above the industry average. The move to zero fee switches of USDT to USDC came as a surprise, as revenue from these transactions has declined this year due to poor market conditions and low volatility.

Coinbase CEO Brian Armstrong told Bloomberg:

Last year in 2021, we did about $7 billion of revenue and about $4 billion of positive EBITDA, and this year with everything coming down, it’s looking, you know, about roughly half that or less.

Related: Coinbase Suffers $1 Billion Net Loss in Q2

As a reminder, Tether has yet to confirm its reserves. Meanwhile, mainstream media is creating FUD around Tether. In particular, The Wall Street Journal states that Tether may not have enough liquidity to make repayments in a crisis. According to the WSJ, the stablecoin issuer’s growing loans pose a significant risk to the recovering cryptocurrency market.

Related: Tether launches euro and gold-pegged stablecoins