The significance of stablecoins has been a hotly debated topic in the crypto community, splitting the opinions of major crypto-proponents across the board. The recent Tether/Bitfinex episode raised many questions about Tether’s status as a dependable stablecoin, since the virtual asset lost its 1:1 pegged valuation against the US Dollar, for a while.
In light of this, Brian Armstrong, CEO of Coinbase, took the opportunity and recently tweeted that it was time for users to lean towards more “trustworthy” stablecoins, explicitly advertising the legitimacy of Coinbase backed-USDC stablecoin.
The tweet did not sit well with many in the community, as the use of USDC was criticized by several people.
Twitter user, @WhalePanda, responded to Brian Armstrong’s tweet and responded that $USDC was even worse than Tether, since it was not backed 1:1 by fiat currency. USDC was majorly centralized and it was regulated, he added.
Using USDC also requires KYC/AML procedures, all of which also accrue a significant processing fee, @WhalePanda added. This fee is split among all issuers of $USDC [including Coinbase]. Hence, any profit that would be made from the cash and the capital-backed assets would be shared between the partners, he argued.
Twitter user, @j3todaro, put forward another argument, stating,
“You can get $USDC without going through KYC. It’s an erc20 token that can move to and from any wallet. Obviously, they have final control and can freeze, but so can tether. They aren’t all that different.”
@WhalePanda’s tweet implies Armstrong has a hidden agenda in promoting new cryptocurrencies on the exchange, especially ones Coinbase is backing. Hence, Armstrong took the Bitfinex fiasco as an opportunity to promote USDC.
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