Coinbase will list Tether’s USDT (-0.08%) on its professional trading platform, allowing investors to deposit the dollar-pegged stablecoin immediately and to begin trading next week.

Coinbase Pro announced late Thursday it would immediately allow “inbound transfers” for USDT in its supported jurisdictions, except for the U.S. state of New York. The stablecoin has been fraught with controversy over questions of its backing and its role in the broader Bitcoin ecosystem, and at one point was the subject of an inquiry by the Office of the New York Attorney General (NYAG).

The NYAG settled the inquiry this year, stating that at previous points USDT was not fully backed by U.S. dollars but declined to bring any enforcement or regulatory action. Under the terms of the settlement, Tether will provide a periodic report to the NYAG indicating how the stablecoin is backed and what its reserves look like, starting in May.

Tether has since announced it would provide regular attestations, though these are different from the reports it will send to the NYAG and similar attestations from stablecoin issuers including Centre, Paxos and Gemini.

USDT is listed on the U.S.-based Kraken and Binance.US exchanges, but Coinbase is subject to closer regulatory scrutiny, having gone public last week on the U.S. Nasdaq exchange. The public listing subjects Coinbase to oversight by the U.S. Securities and Exchange Commission, which could include its token listings.

As such, Coinbase’s move Thursday could be read as a vindication of sorts for Tether, long criticized as less-than-forthright about the composition of the reserves backing USDT.

“Starting immediately, we will begin accepting inbound transfers of USDT to Coinbase Pro. Trading will begin on or after 6 p.m. Pacific Time (PT) Monday April 26, if liquidity conditions are met. Please note that Coinbase only supports ERC-20 USDT,” the announcement said.

The exchange will begin supporting trading against its order books after it has sufficient supply, with trading commencing in its usual post-only, limit-only and full trading phases.

“If at any point one of the new order books does not meet our assessment for a healthy and orderly market, we may keep the book in one state for a longer period of time or suspend trading as per our Trading Rules,” the blog post said.

While Coinbase Pro listed USDT, it’s unclear if or when the token will come to its consumer application. Typically, tokens listed on the professional platform are added to the retail side within a few days.

The move also follows a tough week for bitcoin (BTC, +4.53%), which has fallen 18% since Saturday. For the year to date, however, the bellwether cryptocurrency is still up a fulsome 75%.

As the largest stablecoin, USDT serves as integral plumbing for the $2 trillion global cryptocurrency market, allowing traders to easily shift dollars (or a good-enough substitute) between exchanges in order to capture arbitrage opportunities.

UPDATE (April 22, 23:50 UTC): Added context about bitcoin price and USDT’s systemic role and history.

Bitcoin was mostly flat on Friday as buyers and sellers appear to be in a stalemate. The world’s largest cryptocurrency is up about 6% over the past week and is expected to hold support above $30,000 into the weekend. 

In traditional markets, the S&P 500 and Nasdaq reached all-time highs after a better-than-expected U.S. jobs report on Friday. For now, sentiment for risky assets appears to be alive as well as volatility declines in both traditional markets and bitcoin. 

Latest prices

Cryptocurrencies:

• Bitcoin (BTC) $33228, -0.1%
• Ether (ETH) $2091, -0.59%

Traditional markets:

• S&P 500: 4352.4 +0.75%
• Gold: $1786.97, 0.58%
• 10-year Treasury yield closed at 1.437%, compared with 1.463% on Thursday

Options volatility

Bitcoin’s implied volatility remains elevated despite rangebound trading since mid-May, according to options data provider Skew. This suggests traders are not complacent given the recent stabilization in price. There is still some uncertainty present in the options market at the beginning of July. 

“$34,000 is a key level for accelerated moves to the up or downside with highest gamma exposure for both puts and calls,” Pankaj Balani, CEO of Delta Exchange, wrote in an email to CoinDesk.

“As spot trades lower, the market has yet to find its footing,” Balani wrote. “As long as players write upside exposure in size, a rangebound play with more downside risk seems likely.”

Bitcoin lags crypto stocks

Crypto related stocks such as Coinbase (NASDAQ: COIN) and Riot Blockchain (NASDAQ: RIOT) have outperformed bitcoin over the past few months, albeit within a tight range. Some traders are looking for a breakout or breakdown in stocks as a leading signal for bitcoin in the coming weeks. 

COIN registered a downside exhaustion signal in June, confirmed by DeMark indicators. The stock will need to see a break above $260 to shift the downtrend since its April debut.

Cashing out of Grayscale Bitcoin Trust

The bitcoin market could get a boost this month from the expiration of investor restrictions on the sale of shares in the Grayscale Bitcoin Trust (GBTC), the world’s largest cryptocurrency fund. Grayscale is owned by the Digital Currency Group, which is also the parent company of CoinDesk.

Some digital asset analysts and investors say it’s possible some of these investors might need to enter the market to buy bitcoin in order to repay cryptocurrency loans they used to finance their original purchases of the GBTC shares.

Altcoin roundup

• USDC on Tron: The circulating supply of USD coin (USDC) on the Tron blockchain has surpassed 108 million in less than a month, according to blockchain data. This could be another sign that crypto traders are increasingly turning to blockchains that provide cheaper transaction fees with faster speed than what’s found on Ethereum.
• Grayscale buys ADA: Grayscale Investments added ADA, the native token of the Cardano blockchain, to its Digital Large Cap Fund. The digital asset manager has sold some existing constituents of the fund and used the proceeds to purchase ADA.

Relevant news

Other markets

Most digital assets on the CoinDesk 20 ended up lower on Friday.

Notable winners as of 21:00 UTC (4:00 p.m. ET): 

the graph (GRT) +7.39%

cardano (ADA) +3.61%

nuCypher (NU) +3.35%

Notable losers: 

eos (EOS) -1.73%

yearn Finance (YFI) -1.36%

stellar (XLM) -1.32%

The circulating supply of USD coin (USDC) on the Tron blockchain has surpassed 108 million in less than a month, according to blockchain data. This could be another sign that crypto traders are increasingly turning to blockchains that provide cheaper transaction fees with faster speed than what’s found on Ethereum.

The achievement came just a day after Circle, the crypto-native financial service firm behind the dollar-pegged stablecoin, said it added support for USDC on Tron. One of the stated goals of doing so is “enabling [USDC] growth in Asia and around the globe,” according to Circle’s website.

Blockchain data shows that the first transfer of USDC on Tron was on June 11.

A stablecoin, USDC is pegged 1-to-1 to the U.S. dollar, with each token redeemable for an equal number of greenbacks.

Crypto influencer Justin Sun’s Tron blockchain has already gained traction for the rapid growth of the largest stablecoin by asset cap, tether (USDT), on the network. As CoinDesk reported, there are more tether on Tron than on Ethereum, the blockchain of ether (ETH), as traders favor blockchains that provide faster and cheaper transactions.

While tether is the most traded crypto asset, there’s been a fast growing adoption of USDC on decentralized finance (DeFi), according to data from CoinGecko. Meanwhile, data from Glassnode indicates that nearly half of USDC supply is currently used in smart contracts.

The big difference from how USDC is used on Ethereum is that on Tron it’s mostly used for inter-exchange transfers, said Ryan Watkins, research analyst at Messari. He noted that nearly all of the USDC supply on Tron is concentrated in the top 10 addresses.

Tether’s and now USDC’s growth on Tron could be an indicator that “a lot of exchanges just move stablecoins over to Tron instead of Ethereum to avoid fees,” Watkins said.

Tron’s Sun told CoinDesk in a WeChat message that the USDC supply concentrated on the top addresses serves as a “reserve” for exchanges that will trade USDC on Ethereum for those on Tron soon.

“We will burn those ERC-20 USDC that are sent to the Tron blockchain,” Sun said, who pointed out that crypto exchange Poloniex already started supporting USDC on Tron.

By press time, Circle did not immediately respond to requests for comments about USDC’s development on Tron. The article will be updated when a response is received.

UPDATE (July 3, 2021, 19:18 UTC): the story is updated with responses from Justin Sun.