Digital Asset Exchange Coinbase Suspends 80 Non-USD Trading Pairs to Boost Liquidity
Digital asset exchange Coinbase has recently made an announcement regarding the suspension of 80 non-USD trading pairs. The main motive behind this decision is to enhance liquidity on its platform.
Improving Market Health and Liquidity
The exchange’s press release on Oct 17 revealed that the decision to delist these pairs, which includes assets like Bitcoin (BTC), Tether (USDT), and the Euro, is a part of its efforts to improve market health and liquidity. Coinbase has been actively monitoring markets, leading to the suspension on the exchange, Advance Trade, and Coinbase Prime.
However, users in eligible regions who have been affected by the suspension on the mentioned platforms can still access the trading pairs through the exchanges’ more liquid USD order books by using their USDC (USD Coin) balances. They also have the option to trade these pairs with USD unification by utilizing their USDC balances for both USD and USDC order books.
The new USDUSDC experience on Coinbase Exchange is here. We’ve added settlement preferences, so Exchange users can use their USDC balance to trade on our USD books. This makes USDC an even more seamless and easy way to deposit, withdraw, and trade 24/7.
The company introduced the USDC unification in April, allowing users to make the most of their USDC balance for trading on USD order books.
Impact on Trading Volumes
The 80 non-USD markets that have been delisted represent a negligible amount of the platform’s global trading volumes, according to the company. Centralized exchanges (CEX) such as Coinbase and Binance are highly popular in the crypto market due to their high liquidity and growing markets. However, they have also faced criticism for sharing similarities with traditional financial intermediaries.
Coinbase, being the largest exchange by volume in the United States, has been actively working towards improving liquidity on its dominant markets. As a result, the exchange has delisted multiple trading pairs. In September, it announced the suspension of 41 non-USD trading pairs.
Liquidity remains a concern as total trading volume has experienced a significant drop. In Q3 2023, Coinbase reported spot trading volumes of $76 billion, which is a 52% decrease compared to the previous year. It is also one of the lowest figures since the exchange’s public listing on Nasdaq.
Regulatory Challenges and Investor Confidence
Aside from liquidity concerns, Coinbase is also facing regulatory issues with the Securities and Exchange Commission (SEC), which has impacted investor and user confidence in the platform. The SEC filed lawsuits against Coinbase and Binance in June, accusing them of offering trading services on unregistered securities, improper registrations, and asset commingling. Both exchanges have expressed their determination to vigorously defend themselves against these allegations in court. Similarly, Binance has also experienced a decline in its market share for the seventh consecutive month due to global regulatory hurdles.
