Coinbase, the U.S.-regulated cryptocurrency exchange, has officially enabled trading and transfers for Tether (USDT) as of May 4th. Initially, the platform only supports ERC-20 standard USDT.
Key Developments and Background
Compliance Challenges and Delays
Coinbase faced two prior delays in listing USDT due to unresolved compliance concerns:
- In May 2020, Coinbase Custody announced support for ERC-20 USDT but retracted the feature within a month.
- Earlier this year, Coinbase postponed the listing again citing API issues, just days after its public market debut.
Tether’s Regulatory Struggles
Tether Limited, the issuer of USDT, has been embroiled in legal controversies, including a settlement with the New York Attorney General in February. This resolution marginally improved Tether’s reputation amid ongoing scrutiny.
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Technical and Market Implications
- ERC-20 Exclusivity: Coinbase’s current support is limited to Ethereum-based USDT, excluding other blockchain variants (e.g., Omni, TRC-20).
- Investor Access: Users can now trade and transfer USDT, expanding Coinbase’s stablecoin offerings alongside USD Coin (USDC).
FAQs
1. Why did Coinbase delay USDT listing twice?
Compliance reviews and technical adjustments (e.g., API integration) necessitated the delays to meet regulatory and operational standards.
2. Which USDT versions does Coinbase support?
Only ERC-20 USDT is available; other versions like Omni or TRC-20 are not yet supported.
3. How does Tether’s legal history affect Coinbase?
While Tether’s past issues raised concerns, Coinbase’s due diligence aims to mitigate risks for its users.
4. Will Coinbase add non-ERC-20 USDT in the future?
No official announcement has been made, but multi-chain support could be considered based on demand and compliance.
5. How does this impact USDT’s market liquidity?
Listing on a major exchange like Coinbase may enhance USDT’s liquidity and adoption in the U.S. market.
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