Coinbase waives fees for buying USDC with non-USD currency
Nasdaq-listed crypto exchange operator Coinbase has waived commission fees for buyers of USD Coin (USDC) with non-USD fiat currency in a bid to increase the stablecoin adoption outside the United States.
In a blog post, Coinbase announced new policy changes aimed at building more on-ramps for users to access Circle-issued stablecoin.
Per its own research, 3x more USDCs are bought with the buck versus non-USD currencies. In part, the exchange explains, this was due to the fees that buyers outside of the US have to pay fees to convert their local currency into USDC.
Acting as a sort of safe haven where crypto traders can park their assets in volatile markets, USDC is an Ethereum-based ERC-20 coin, which makes it easy for wallets, exchanges and other smart contracts to interact with the token.
“The way to correct this, and accelerate adoption of USDC internationally, is by establishing global parity for all users. To achieve this, from the date of this announcement, Coinbase will waive commission fees when customers buy or sell USDC via any fiat currency on Coinbase, from AUD to ZAR,” Coinbase said.
Issued by Boston-based issuer Circle, USDC is the second largest stablecoin with a market cap of $43.9 billion. However, this figure is lower by more than 12 percent when compared to more than $50 billion a month ago, according to data from CoinMarketCap.
Part of the USDC’s struggle can be attributed to Binance’s recent decision to convert customers’ holdings in three rival stablecoins, including USD Coin (USDC), into its own token (BUSD). As a result of the move, Binance removed spot, future and margin trading with USDC, USDP and TUSD pairs.
The news comes shortly after Circle, for the first time since its launch in 2018, has revealed a breakdown of its reserves, as well as a complete list of USDC reserve custodians.
The breakdown, dated as of June 30, 2022, showed that Circle held 100% of its $55.7 billion reserves at the time were in cash and cash equivalents. Specifically, short-term United States Treasuries formed the majority of its cash equivalents category with $42.12 billion or a 75 percent share. The company also reported $13.58 billion in cash held at regulated financial institutions in the US.
Since launching its US dollar-pegged USDC in 2018, Circle has published third-party monthly attestations to confirm that it does possess sufficient capital to back each individual token on a 1:1 basis.