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Surprise: Coinbase Pro Legitimizes Controversial USDT Stablecoin

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Newly-listed Coinbase will list Tether’s controversial USDT stablecoin on its Coinbase Pro trading platform. The surprising move from the regulated cryptocurrency exchange giant is seen as a vindication for Tether. 

USDT is the most widely-used stablecoin in the world, with a market cap over $48 billion. Tether Limited, claims to hold reserves that fully back each USDT. However, the market has criticized Tether, the dollar-pegged stablecoin, for being less-than-forthright about the composition of the reserves backing USDT. It also draws controversy over its role in the broader Bitcoin ecosystem.

Starting today, Coinbase begins accepting inbound transfers of USDT to Coinbase Pro. Trading will begin on or after 6PM Pacific Time (PT) Monday April 26, if liquidity conditions are met.

Coinbase’s professional trading platform, Coinbase Pro, only supports ERC-20 USDT running on the Ethereum blockchain. 

Tether’s USDT stablecoin is currently live on several blockchains such as Ethereum, Solana, Algorand, EOS, Liquid Network, Omni, Tron, and Bitcoin Cash’s Standard Ledger Protocol. It also plans to launch USDT on the Polkadot and Kusama networks.

This is an interesting move for Coinbase, which launched competing stablecoin USD Coin (USDC), in a consortium with Circle.  

Regulators to examine Binance’s Stock Tokens

As another industry headline, European regulators are examining Binance for its new stock token offering. 

Last week, Binance listed Tesla stock tokens, followed by Coinbase stock tokens, which track the performance of those stocks. Binance users are able to purchase as little as fractions of those shares, with prices settled in Binance USD (BUSD). They also qualify holders for returns including dividends. 

European regulators, including the UK’s Financial Conduct Authority, are examining whether Binance complied with security rules. The Financial Times reported the news. 

Additionally, the South China Morning Post reported that Binance is marketing its stock token product in Hong Kong, and the campaign could be deemed a regulated activity that requires a license in the city. 

Binance does not have any such license in Hong Kong according to SFC records. On its website, Binance does not mention Hong Kong among jurisdictions that bar trading in security tokens.