The crypto community always produces dual reactions to stablecoins – some believe this is the future of the crypto-based economy, others think that these centralized, fiat-pegged coins are no good and lack the quality fundamental for crypto: decentralization.
However, since running crypto platforms is still business for profit, when some market players go down, others try to drag users’ attention to their own product. This is what Coinbase’s CEO has attempted to do.
Brian Armstrong promotes USDC, criticizing Tether
After the recent scandal involving the Bitfinex exchange, Tether Ltd and the NY State Supreme Court, it became clear that USDT is USD-backed by only over 70 percent.
The head of Coinbase published a Twitter post, rebuking Tether’s USDT and saying that the community should start paying attention to more ‘trustworthy’ stablecoins, among which is USDC.
With the confirmation that Tether is not fully collateralized, my hope is that the industry graduates to more trusthworthy stablecoins, including https://t.co/lZQKCUDjAH— Brian Armstrong (@brian_armstrong) May 1, 2019
One more piece of reliable infrastructure to help build the open financial system.
Negative reception by the community
The comment thread under the original post made it clear that the community is not happy with USDC, saying that stablecoins are not proper crypto.
WhalePanda user also responded to Armstrong’s tweet, saying that USDC, launched by Circle and Coinbase, is far from being 100% backed by cash and that it is centralized with high fees.
$USDC isn't backed 1:1 by cash, it's regulated, requires KYC/AML and the issuers (Coinbase is one of them) take a lot of fees. It's actually way worse than Tether... but tell me more about the coin you're desperately trying to sell this time.https://t.co/UHRxmAJZku— WhalePanda (@WhalePanda) May 2, 2019
Summarizing, WhalePanda says that USDC is even worse than USDT. Besides, WhalePanda added, the use of USDC requires KYC.
Recently, U.Today wrote about negative sentiment among crypto users on Reddit regarding KYC rules.
Overall, WhalePanda seems to be accusing Armstrong of taking Tether’s fiasco as an opportunity to promote his own product.
Stablecoins are becoming widely spread
Still, many crypto users find stablecoins good enough. This can be proven by the recent partnership between Paxos Standard (PAX) and Blockchain.com, one of the oldest and most popular crypto wallets.