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

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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.

Coinbase Pro Announces Listing of Stablecoin Tether (USDT)

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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).

Cardano Sees First-Ever Stablecoin Launched on Network

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Bloomberg

(Bloomberg) – Europe’s brightening economic outlook as Covid-19 vaccinations pick up is also accelerating the timetable toward a new danger.As investors get ready for growth to break out, they’re also preparing for the inevitable consequence: withdrawal of European Central Bank emergency funding. For the region’s most indebted economies — including perennial standout Italy — that would put them face-to-face with market forces they can’t handle. Citigroup Inc. is bracing for a taper of bond buying as early as June, and M&G Investments says it’s time to start shorting peripheral debt.Because of the ECB’s dramatic measures over the past year, never have borrowing costs in the euro-area been so disconnected from risk. Much of the region is coming off the back of the worst recession since at least World War II, deficits have soared and debt is at eye-watering levels.Yet an investor lending money to Italy for 10 years can only expect to receive a rate of interest of around 0.75%. Greek bonds, considered a junk asset by all three of the major credit ratings agencies, come with a rate of less than 1%. A decade ago, the euro-area debt crisis pushed its yields above 40%.“You only get temporary elimination of credit risk in European sovereigns when you’re in an emergency,” said Eric Lonergan, a money manager at M&G. “The problem is when you come out of emergency, you’re back to market forces in your bond market and some of these numbers look really, really bad. Europe is ironically vulnerable to recovery.”The rally in euro-area debt is mostly down to the ECB’s 1.85 trillion-euro ($2.2 trillion) pandemic bond purchase program, and it’s helped to line investor pockets. Over the past year alone, Italian bondholders have made returns of more than 10%, according to Bloomberg Barclays Indices. Over a decade, they would have nearly doubled their money. “The country is able to refinance debt at much lower yields because of the ECB, so the crisis has been somewhat of a blessing in disguise for Italy,” according to Hendrik Tuch, head of fixed income NL at Aegon Asset Management. “Low Italian sovereign bond yields and spreads are not made in Rome but in Brussels and Frankfurt, which is the main issue for the longer-term outlook on Italian sovereign bonds.”While ECB President Christine Lagarde said this week that it would be “premature” to talk about easing support, the debate about what to do and when could be fast approaching. Some policy makers are ready to argue at the June meeting that the pandemic emergency purchase program should start being scaled back in the third quarter, Bloomberg reported Friday, citing officials familiar with internal deliberations. Read More: ECB Officials Expect Heated June Decision on Crisis Program Lagarde Says ECB Isn’t Discussing Phase-Out of Stimulus Bloomberg Economics: Lagarde’s Optimism Suggests Less PEPP Buying After 2QDespite Lagarde’s reassuring words, such talk will heighten investor focus on the day of reckoning. Without emergency support, the focus will return to debt in Greece, Italy and Spain, which ballooned further in 2020 due to necessary health and crisis spending, and whether it can ever be brought under control.At PGIM Fixed Income, which manages about $968 billion, head of global bonds Robert Tipp is keeping the tilt toward peripheral bonds he’s had since the sovereign debt crisis, but is also starting to worry about the post-taper outlook.“The risk is how fraught is the process of going from this heavy stimulus environment back to one of fiscal rectitude,” he said. “The fundamentals are lousy for some of these countries.”For now, European Union member states are preparing to spend money from the bloc’s recovery fund, due to start disbursing cash around the middle of the year. Italian Prime Minister Mario Draghi, the former ECB president credited with saving the euro during the last debt crisis, is planning to reengineer Italy’s economy with more than 200 billion euros of funds.But while this stimulus will help the recovery, the question is whether it will generate sustained growth strong enough to meaningfully chip away at Italy’s enormous debt pile, currently around 160% of economic output. Fitch Ratings warned this month that Greece’s debt-to-GDP ratio would stay above 200% this year and any failure to reduce it could lead to a negative rating action.Another key question is when the EU might re-impose fiscal rules — which were suspended during the pandemic — and what form they will take. While the fiscal situation in some countries has to be tackled, overly strict targets, for example on deficits, could do more damage than good by sucking life out of economies. Saxo Bank A/S is one of the biggest doomsayers on Europe’s periphery, warning that there could be a sovereign debt crisis part 2, beginning with a exodus of foreign investors from Greek debt, where they own 90%. Saxo’s concern is that with U.S. bond yields 60 basis points higher than at the start of the year — and with the currency hedging equation increasingly favorable — investors would prefer to put money there rather than in higher-yielding European sovereigns.For the ECB, the unwinding dilemma will once again see it grappling with the inherent challenge of the euro area: setting monetary policy for 19 countries with vastly different economic, inflation, unemployment and debt situations. If it begins to tighten, the peripheral nations will be the ones that lose out, making their huge deficits harder to finance.“It’s very difficult to see something anything other than fiscal austerity,” said M&G’s Lonergan. “I don’t know when it will strike but I think you’re getting very, very good odds if you look at a lot of the more vulnerable parts of the European bond market now.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

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