Converted Organics (COIN) - Coinbase Pro Lists Controversial Crypto Stablecoin Tether: What You Need To Know

Converted Organics (COIN) - Coinbase Pro Lists Controversial Crypto Stablecoin Tether: What You Need To Know

Coinbase Pro, the crypto exchange owned by the newly public Coinbase Global Inc (NASDAQ:COIN), has announced that it will list crypto stablecoin Tether (USDT).

What Happened: USDT has its value pegged to the value of the U.S dollar and is the largest stablecoin by market cap.

Although it operates on a number of blockchains, Coinbase Pro says it will only support the ERC-20 USDT running on the Ethereum blockchain.

Trading is set to begin “on or after 6 PM Pacific Time on Monday, April 26,” subject to the liquidity conditions being met.

Why It Matters: With over $49 billion in market cap, USDT forms the backbone of the majority of crypto trading as it is the most common trading pair on several exchanges. Despite its status as the number one stablecoin, USDT has been the subject of controversy for a number of years.

Tether Limited, the company behind USDT, was the subject of a New York Attorney General (NYAG) inquiry in 2019.

NYAG Letitia James obtained a court order against Tether and affiliated crypto exchange Bitfinex for the alleged cover-up of an $850 million loss.

Tether was also under scrutiny regarding whether USDT was actually backed one-for-one by the U.S dollar.

Earlier this year, the inquiry ended in an $18.5 million settlement with Tether admitting no wrongdoing and agreeing to provide quarterly reports on its reserves.

See also: How to Buy Tether (USDT)

Coinbase’s decision to list the stablecoin may serve to dispel any Tether FUD that still remains in the market, as well as provide more arbitrage opportunities to traders.

Price Action: Tether (USDT) was trading at $0.99 at press time. The trading volume increased by more than 45% after the announcement.

Coinbase Pro Announces Listing of Stablecoin Tether (USDT)

Coinbase, the US-based cryptocurrency exchange, announced support for stablecoin Tether (USDT) and mentioned that the trading of USDT will start on Coinbase Pro from Monday 26 April. Trading will be available in the company’s supported jurisdictions.

According to the official announcement, Coinbase is only supporting ERC-20 USDT running on the Ethereum blockchain. Coinbase Pro users are now allowed to transfer Tether (USDT) into their accounts ahead of the trading.

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Tether is the most valuable stablecoin in the world. The cryptocurrency currently has a market cap of approximately $50 billion. USDT is the 4th most valuable digital currency in the world. The total market cap of Tether has surged significantly since the start of this year.

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“Starting immediately, we will begin accepting inbound transfers of Tether (USDT) to Coinbase Pro. Trading will begin on or after 6 PM Pacific Time (PT) Monday, April 26, if liquidity conditions are met. Please note that Coinbase only supports ERC-20 USDT. Once sufficient supply of USDT is established on the platform, trading on our BTC-USDT, ETH-USDT, USDT-EUR, USDT-GBP, USDT-USD and USDT-USDC order books will launch in three phases, post-only, limit-only and full trading,” Coinbase mentioned in the official announcement.

Coinbase Listing

The American cryptocurrency exchange is one of the largest digital exchanges in the world. Coinbase recently went public through a direct listing on Nasdaq under the ticker symbol of COIN. The shares of the company jumped nearly 30% on its debut but saw a correction in the following days. According to the closing price of Thursday, COIN shares dropped below $300. The cryptocurrency exchange reported a significant jump in trading volumes during Q1 of 2021. The company also reported total revenues of approximately $1.8 billion during the first three months of 2021.

The recent Tether support from Coinbase came after the company expanded its product offering with the addition of several digital currencies, including Ampleforth Governance Token (FORTH), Enjin Coin (ENJ), NKN (NKN), Origin Token (OGN), Ankr (ANKR) Curve DAO Token (CRV), Storj (STORJ) and Cardano (ADA).

Deutsche Telekom joins Celo remittance blockchain, which adds Euro stablecoin

Today Deutsche Telekom announced a ‘significant’ purchase of the Celo public blockchain’s cryptocurrency. The smartphone focused blockchain offers decentralized finance, including remittances, and is best known for its Alliance for Prosperity. When Facebook first unveiled Libra, it talked a lot about financial inclusion. Some view Celo in a similar light but without the baggage of international regulator attention.

The reason for the token purchase by Deutsche Telekom, is so its subsidiary T-Systems MMS can operate a validator node for the proof of stake blockchain network. Celo also announced the launch of its second stablecoin for euros, alongside the existing dollar one.

“Our investment in CELO, combined with infrastructure operated by T-Systems, allows our company to take a strategic approach to participating in a public blockchain network,” said Adel Al-Saleh, Deutsche Telekom director and CEO of T-Systems. “We are able to secure the Celo network with our investment and our own cloud infrastructure while facilitating user onboarding and use-case development on top of the Celo network.”

The cryptocurrency purchase was made by the Telekom Innovation Pool (TIP), its strategic investment fund. A former T-Systems staffer observed on Twitter that this highly innovative step by a very large company is being pigeon-holed as a fintech investment.

T-Systems MMS started to get involved in staking services for public blockchain more than a year ago and participates in the Flow blockchain. It also provides data feeds for decentralized oracle Chainlink. When we spoke to the T-Systems MMS team last year, they explained how the hosting of nodes and providing staking services for Proof of Stake (PoS) public blockchains is a modern extension of traditional telecoms infrastructure services.

What’s a validator node?

Proof of Work requires many energy-hungry calculations to prevent someone from easily corrupting a blockchain. In contrast, Proof of Stake works by nodes that validate transactions risking or staking money in the form of cryptocurrency. If the node misbehaves such as by adding a false transaction, its stake could be at risk.

Every blockchain has different rules about when penalties might be imposed, called slashing. And infrastructure providers such as T-Systems MMS are best positioned to make sure stakes are not accidentally slashed. The upside is that those willing to stake cryptocurrencies earn a decent return. For example, currently Polkadot offers a staking reward of more than 13% and most offer more than 5%.

More stablecoins

Meanwhile, Celo also announced the addition of a euro denominated stablecoin cEURO. While it’s not the only application, one of Celo’s first is to enable a secure and inexpensive way to tranfer money using smartphones. To date, in terms of fiat currency equivalents, it has offered cUSD.

Both stablecoins are algorithmic and supported by multiple crypto-assets held in the Celo Reserve, such as bitcoin and ether.

“Transferring money between countries is still a huge challenge because of the siloed systems created by traditional financial services,” said Rene Reinsberg, co-founder of Celo. “An open infrastructure like Celo, coupled with the Celo Euro stablecoin, enables easy access to digital assets from virtually anywhere in the world within seconds, creating an entirely new remittance market for the European Union.”

Meanwhile, Celo’s Alliance for Prosperity has more than 130 members that include Andreessen Horowitz, Anchorage, Coinbase, GSMA, and Mercy Corps. It aims to provide inclusive mobile applications for easier transfers, peer-to-peer lending, international remittances, digital assets and wallets.