Coinbase CEO Walks the Crypto Plank for Endorsing USDC After Bitfinex/Tether Drama, 1.1 Million USDC Minted
The Bitfinex/Tether episode has eroded a lot of the trust of the community in stablecoins. Tether, which used to have its assets backed 1:1 with USD in order to make prices stable, used some of its funds to loan money to Bitfinex, which shares the same owners. The episode was a scandal in the industry.
Now, the CEO of Coinbase, Brian Armstrong, decided to use the occasion to pump the popularity of USD Coin (USDC). He affirmed that USDC was a trustworthy stablecoin and affirmed that it had more legitimacy than Tether. USDC, in case you do know this, is a token that is backed by Coinbase. Because of this, the token and the company have a very close relationship.
The tweet, however, was not very well received by the community. WhalePanda, a prominent Twitter personality, affirmed that USDC was not backed 1:1 by cash because it was regulated and it had to spend money on Know Your Customer (KYC) and Anti-Money Laundering (AML), which would diminish its price because of this centralization.
According to him, it was worse than Tether (which may be an overreaction since Tether is actually with $700 million USD less than what it should have).
Another user, however, @j3todaro, told WhalePanda that it was a lot like Tether because it was an ERC20 token that you could just trade and have final control over.
1.1 Million USDC Tokens Minted After Tweet
Despite the reaction of the community, USDC minted 1.1 million new tokens soon after the tweet. The news was given by WhaleAlert, which is focused on aggregating data about transactions. This has raised some questions on whether the tweet and the creation of so many tokens are linked.
Recently, the USDC network has been very active and the token was integrated with the Matic Network, which received investments from Coinbase Ventures recently.
According to the CEO of Matic, Coinbase Ventures was one of the largest investors in the seed round and this would help the company to actually get closer to realize its vision of the project and to scale decentralized apps.