Cryptocurrency exchange Coinbase has announced the implementation of fees for converting the stablecoin USD Coin (USDC) into USD.
Circle serves as the issuer of USDC, a stablecoin that, as of last year, was surpassed by Tether’s USDT token in terms of market capitalization.
Coinbase Introduces USDC Conversion Fees
According to a January 29 post on the exchange’s website, they will impose charges on institutional clients conducting net USDC to USD conversions exceeding $75 million within a rolling 30-day period.
Coinbase employs a maker-taker fee model to determine its trading fees. Distinct fees are applied to orders based on whether they provide liquidity (maker orders) or take liquidity (taker orders).
The calculation of fees is contingent on the pricing tier at the time of placing the order and not on the tier that would be applicable after the completion of the trade.
For conversions falling within the $75 million to $150 million range, a 0.1% fee will be applied, while transactions ranging from $150 million to $500 million will incur a 0.15% fee. Notably, conversions exceeding $500 million will face a higher 0.2% fee.
The company has specified that Coinbase Prime clients holding assets over $500 million or maintaining an average of $100 million in USD/USDC throughout a calendar month will be exempt from these USDC conversion fees.
Furthermore, participants in Coinbase’s exchange liquidity program, meeting Tier 1 or Tier 2 requirements, will enjoy a waiver of USDC conversion fees when fulfilling their monthly obligations.
A spokesperson from the exchange expressed the company’s dedication to innovating its product offerings and incorporating user feedback. The commitment aims to deliver a premium experience that aligns with customer expectations while advancing the company’s business objectives.
Coinbase Temporarily Waived Conversion Fees
In December 2023, Coinbase urged its customers to shift their assets from USDT to USDC. The platform’s team highlighted recent events that had challenged some stablecoins, emphasizing that USDC stands out as one of the most reliable and reputable digital dollars, fully backed by high-quality reserves.
Coinbase temporarily waived conversion fees from USDT to USDC in most regions within the Coinbase Simple Trade trading section to facilitate this transition for retail customers.
In March 2023, the exchange took precautionary measures by temporarily halting conversions between the USDC stablecoin and U.S. dollars following the collapse of Silicon Valley Bank (SIVB). In a tweet, the firm announced the “temporary pause” during the weekend when banks were closed, with plans to resume conversions on Monday.