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by braingenious 1202 days ago
I’m hearing that you can’t even use USDC to exchange for bitcoin/ETH on Coinbase right now. What does converting between types of crypto have to do with banks? Those transactions should in theory have nothing to do with a banking transaction.

It seems like they’re simply forcing people to hold USDC, full stop, and are blaming banks for their decision to do so.
3 comments
everfree 1202 days ago
For better or worse, Coinbase does not have a USDC/USD trading pair, or USDC trading pairs with most cryptos (BTC, ETH, etc.). For the most part they have USD trading pairs, which if you have USDC you're typically expected to access by redeeming your USDC for USD and then using the USD trading pairs. But since USDC to USD redemption is halted for now, you effectively cannot trade USDC for most common cryptocurrencies on Coinbase without going through one of their (afaik) three live USDC trading pairs - USDC/EUR, USDC/GBP, and USDT/USDC.

However, other exchanges actually do have USDC markets for most other cryptocurrencies. If you deposit your USDC with them, then you can directly trade order books on USDC/USD, BTC/USDC, and ETH/USDC, which function regardless of the lack of redemption and regardless of the actual market price of USDC.

If Coinbase had lots of USDC trading pairs like other exchanges do, it would avoid the issue you outlined in your comment, but it would also fragment liquidity across two markets that are effectively identical during business-as-usual periods where redemptions function properly.

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danielvf 1202 days ago
That's not true, Coinbase has active USDC/USDT, USDC/EUR, and USDC/GBP pairs. I've traded on them overnight. They just disabled the 1-1 conversion with USD.
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everfree 1202 days ago
My bad. Looks like they added those pairs in 2021 and I didn't notice (though it looks like you have to "opt out of the USD and USDC unified experience" in order to access them). I edited my comment accordingly.
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323 1202 days ago
> I’m hearing that you can’t even use USDC to exchange for bitcoin/ETH on Coinbase right now.

That would be the fault of Coinbase, not Circle or USDC. On other exchanges, like Bitstamp, you can freely buy/sell your USDC to crypto/fiat.

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capableweb 1202 days ago
USDC is supposedly backed by USD. If Cirle/Centre doesn't have access to enough USD, they cannot maintain the peg of USDC.
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braingenious 1202 days ago
What does that have to do with exchanging for crypto?

If I move USDC from one wallet to another, and someone else moves bitcoin from one wallet to another in exchange for that USDC, that transaction happens entirely on the blockchain and at no point involves a bank or a peg.

The only reason to disable that function is to force people to hold USDC.

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