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Provided USDC is indeed fully solvent and remains pegged, a run on USDT might even strengthen its position through an influx of new customers. However, if the U
by mypastself 4y ago
Provided USDC is indeed fully solvent and remains pegged, a run on USDT might even strengthen its position through an influx of new customers. However, if the USDT failure causes the crypto cataclysm some are anticipating, couldn’t Coinbase be exposed to such an extent that the company becomes insolvent?
- darawk 4y agoEven in the event that Coinbase became insolvent, theoretically that shouldn't impact USDC. USDC has entirely separate reserves that are in short term debt instruments (i.e. T-bills) and cash equivalents, uncorrelated to the crypto ecosystem, and very safe. Even if the parent company of USDC (which is actually Circle, not Coinbase) were to become insolvent, that theoretically doesn't impact USDC at all, other than maybe USDC would have to wind down operations, and then people would just redeem for USD. The only scenario where USDC holders would be in trouble is if Circle violated their agreements and started making unsafe self-dealing investments with the USDC deposited funds. That is something that theoretically could happen, but since the operators are in the US, they would certainly go to prison for it. And we have reasonably reliable audits that state clearly that, at least so far, this has not happened.
- mypastself 4y agoHuh, I didn’t know all those details about USDC. It’s strange to me that anyone would pick Tether over it, then. Is USDC more difficult to acquire, especially on international exchanges?
- ivalm 4y agoI’m guessing one major difference is that redemption puts you under us anti money laundering regulations.