Coinbase challenges tether – launches new stablecoin for U.S. dollar

Coinbase challenges tether – launches new stablecoin for U.S. dollar.

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Tim Haldorsson

tim.haldorsson@trijo.co

Together with the crypto payment company Circle, Coinbase is launching a new stablecoin (USDC). The new currency is supposed to work as a substitute for the dollar and will be based on ethereum's blockchain.

Lately, so-called “stablecoins” have been a widely discussed topic. A stablecoin is supposed to serve as a safe haven for cryptocurrencies, for example by following the price of the U.S. dollar and maintaining a relatively stable price. Tether (USDT) is by far the biggest stablecoin and today there are around two billion tethers on the market.

Together with the crypto payment company Circle, the American crypto exchange giant Coinbase now launches a new stablecoin called usd coin (USDC), which is supposed to serve as a substitute for the U.S. dollar.

“We think this is a key step”

Recently, several new stable coins have been launched. For example, the American crypto exchange Gemini launched a stablecoin called gemini dollar (GUSD), and also the company Trust Token has launched its trueusd (TUSD). These stablecoins have grown rapidly on the market.

The fact that new stablecoins quickly have gained market shares may be due to the fact that today’s biggest stablecoin, tether, has been under the headlight for quite some time. Many investors have lost confidence in tether and the currency is currently trading under the price of one dollar. This may be a sign that the market is wondering if each tether is really worth one dollar, and might be a reason why Coinbase now wants to create a better stablecoin.

“We are issuing stablecoins backed 1:1 with the U.S. dollar, completely audited, completely transparent. We think this is a key step toward unlocking innovation in crypto”, said Asiff Hirji, the chief operating officer at Coinbase.

Usd coin is based on ethereum’s blockchain

The new stablecoin Coinbase is launching is backed by U.S. dollar, one U.S. dollar per usd coin, on a bank account that will undergo regular public audits by independent parties.

Usd coin is an ERC20 token on ethereum’s blockchain and will therefore be able to work with wallets that can receive ERC20 tokens.

Coinbase has a mobile app for Android and Iphone and through it you can now send, receive and store your usd coins. The crypto exchange writes on its blog that they will also integrate the stablecoin on their Coinbase Pro platform in the coming weeks.

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