By Liang Yushan
April 28 — Coinbase once again announced the postponement of USDT trading, citing API issues as the reason. Given Coinbase’s extensive experience through multiple market cycles and its public listing—demonstrating technical competence—why would it delay USDT trading twice for the same API-related issue?
Why Did Coinbase Postpone USDT Trading Twice?
A plausible explanation revolves around compliance concerns and market sentiment.
Coinbase’s hallmark is regulatory compliance, prioritizing strict adherence to guidelines and cautious asset listings. In 2017, Dan Romero, then General Manager of Coinbase, tweeted about potentially adding new cryptocurrencies based on user feedback but emphasized caution due to U.S. regulatory scrutiny.
For a compliance-focused, publicly traded platform like Coinbase, listing USDT—a stablecoin embroiled in controversy—seems counterintuitive.
In May 2020, Coinbase Custody announced support for USDT (ERC-20) custody, a move confirmed by Bitfinex and Tether CTO Paolo Ardoino. However, the tweet was later deleted, and USDT vanished from Coinbase’s supported assets list—coinciding with Coinbase’s IPO preparations.
Why List USDT Post-IPO?
- Regulatory Progress: In February 2021, Tether settled a two-year legal dispute with the NYAG, agreeing to pay an $18.5 million fine and provide quarterly reserve reports for two years.
- Market Demand: USDT dominates DeFi, with over 12 million users (compared to USDC’s 3.4 million).
- Competitive Pressure: Coinbase acknowledged in an SEC filing that DeFi platforms pose a threat, urging rapid adaptation.
Yet, backlash ensued. Critics on Twitter called the decision "a mistake," highlighting lingering distrust in Tether’s transparency.
DeFi’s Rise and CeFi’s Response
Coinbase’s urgency to list USDT reflects a broader trend: DeFi is reshaping CeFi.
- User Growth: USDT’s daily active addresses far surpass USDC’s.
- Revenue Strategy: Listing high-demand assets like USDT captures trading fees and enhances Coinbase Wallet’s retention.
- Defensive Move: With DeFi platforms like Uniswap eliminating listing fees and offering asset-first advantages, exchanges must compete for new assets to retain users.
Competitors like Binance, OKEx, and Huobi accelerated public chain development to counter DeFi’s disruption. Coinbase, having missed the public-chain wave, now relies on strategic asset listings.
Conclusion: The New Battleground
The future of crypto exchanges hinges on asset acquisition.
- CEXs vs. DEXs: Centralized platforms must innovate to compete with decentralized alternatives.
- Beyond Trading: Public chains and DEX integration are no longer optional—they’re survival tools.
The message is clear: New assets drive users, liquidity, and revenue.
FAQ
Q1: Why is USDT controversial?
A: Critics question Tether’s reserve transparency and its legal history, including the NYAG settlement.
Q2: How does USDT benefit Coinbase?
A: It attracts DeFi users, diversifies revenue, and counters competition from DEXs.
Q3: What’s next for Coinbase?
A: Expect more DeFi-aligned listings and potential infrastructure investments.
👉 Explore DeFi trends with OKX
This article originally appeared on Mars Finance.
Disclaimer: Views expressed are the author’s alone. This content is not investment advice. Investors should conduct independent research.
### **Key SEO Elements**
- **Keywords**: Coinbase, USDT, DeFi, stablecoin, compliance, API, Tether
- **Structure**: Hierarchical headings, bullet points, and anchored links.