"A decisive sign of legitimacy." Coinbase Holds Tether Stablecoin Listing
The Tether stablecoin received probably the highest sign of confidence to date. Its addition was announced by the American cryptocurrency exchange Coinbase.
Tether will be listed on the Coinbase Pro platform in the form of an ERC20 token on the Ethereum blockchain. Trading will start on April 26 in pairs with bitcoin, ether, euro, pound, dollar and USDC, subject to compliance with liquidity requirements. Stablecoin will be available in all jurisdictions served by Coinbase, with the exception of the state of New York. Prior to this, USDT was already available on such US exchanges as Kraken and Binance.US
Coinbase, however, is subject to stricter regulatory oversight compared to its closest competitors. The listing comes just over a week after Coinbase shares were added to the Nasdaq stock market. Two months ago, Tether settled claims with the New York Attorney General's Office, which fined the company and its sister exchange Bitfinex $18.5 million. Prosecutor Letitia James then issued a threatening statement.
"Bitfinex and Tether have irresponsibly and unlawfully covered up large financial losses to support their scheme and protect their profits," she said. – Tether's claims that its virtual currency was fully backed by US dollars at all stages were false. This decision makes it clear that those who trade virtual currencies in New York and think they can get away with our laws cannot and will not do so."
Tether has been surrounded by a controversial reputation for many years due to allegations of unsecured issuance of stablecoins to manipulate the cryptocurrency market and confirmed lending to Bitfinex from its own reserves, which was the subject of an investigation by the Prosecutor General's Office. Nevertheless, the facts speak for themselves. Coinbase, after waiting for two key events, conducts a stablecoin listing.
"Traders have long understood that without USDT, it will be almost impossible to trade bitcoin and altcoins," the Fomocap analyst wrote earlier, mentioning "liquidity, fiat channels, over-the-counter transactions, miners and cold wallets"as areas of application for stablecoin.
Tether remains by far the most traded asset on the cryptocurrency market with a trading volume of $193 billion over the past 24 hours. Next comes bitcoin with $90 billion. The capitalization of stablecoin as a result of rapid growth in the current cycle is approaching $50 billion, although at the beginning of the year it was about $20 billion.
Under the terms of the agreement with the Attorney General's Office, Tether has committed to regularly publish reports on USDT collateral and submitted the first of them in March. Although the methodology for making the assessment leaves much to be desired and is far from a full audit, Moore Cayman confirmed that at the time of the audit, the USDT was indeed provided with excess reserves of the issuer.
"We believe that the evidence we have received is sufficient and appropriate to provide a reasonable assurance opinion. The management of Tether Holdings Limited is responsible for the information provided in their report that relates to the consolidated assets of Tether Holding Limited to support their consolidated liabilities, " the audit firm said.
Coinbase takes a similar position in its press release: "In the case of stablecoins such as USDT, the company behind the protocol is responsible for storing reserves that fully support each token. The company behind Tether, Tether Limited, claims to hold reserves that fully support every USDT."
Coinbase has its own stablecoin USD Coin (USDC), issued by the CENTRE consortium, of which it is a member together with Circle. USDC is currently the second largest stablecoin with a capitalization of $11 billion.
"This strongly empowers Tether, which supports huge price movement, and now makes arbitrage on exchanges without the support of fiat currencies more direct, which is of great importance for capital flows," said Adam Cochran, a partner at Cinneamhain Ventures.
Lawyer Stephen Pally suggests looking at the situation from a different angle. "Perhaps this decisively invalidates Coinbase," he wrote.