In the wake of the uproar surrounding Tether’s announcement that it isn’t 100% backed by the USD, Coinbase CEO has a suggestion. Brian Armstrong, the CEO of cryptocurrency exchange Coinbase has suggested to his followers on Twitter that Coinbase’s own Coin ( USDC ) is a more trustworthy stablecoin.
According to Brain, the USDC is a far better stablecoin solution than Tether. The USDC is actually audited and backed 1:1 by US dollars and Coinbase CEO feels this makes it a better choice.
However, a lot of persons disagrees with Brain Armstrong’s tweet. This is because while the USDC is backed by the USD, it isn’t available on as many exchanges as Tether. The USDC can only be found only on top exchanges such as Coinbase, Binance, and Poloniex.
One Twitter user remarked that the USDC is 10% backed by cash and cash reserves and since banks only hold 10% of its cash, it isn’t 100% backed by cash. Others suggested that the USDC won’t the solution but the DAI stablecoin.
The report that Tether isn’t 100% backed by the USD had sparked a frenzy in the market resulting to massive pullouts. With Whale alerts revealing huge amounts of USDT being moved from one exchange to another.
Tether and it’s affiliated company had been in the news causing a serious doubt in stablecoins.
Tether had changed its backing status on its website in March and on March 30, the Attorney General of the company revealed that the company is now just 74% backed by the USD.
The actual problem started after hackers stole $70 million worth of bitcoin from Bitfinex in 2016. And Bitfinex started dipping into Tether’s reserves since they were affiliated.
However, despite the ongoing tussle with Tether, Brain Armstrong still believes that USDC is the answer. However, his suggestion met with a lot of disagreement with many claiming that Dai stablecoin by Maker (MKR) is the solution.
Dai stablecoin is a USD-pegged stablecoin built on the Ethereum blockchain. The pricing is maintained by smart contracts which ensures that price is maintained constantly.
Do you think DAI is the solution or is Brian Armstrong right? kindly share your opinion with us in the comment section below.
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