Coinbase is set to automatically convert user balances of GYEN, the Japanese yen-pegged stablecoin issued by GMO Trust, into USDC, with the conversion scheduled to be completed by October 30. Once the swap is complete, no GYEN balances will remain on the platform, leaving customers holding the dollar-pegged asset in place of their yen-pegged ones.

Update (08:11 UTC): The claims pending against Coinbase over the 2021 price spike were moved to arbitration in January 2023 and remain unresolved under GMO Trust's $6.75 million settlement, which the trust contested and which involved no finding of wrongdoing.

GYEN is a stablecoin pegged one-to-one to the Japanese yen, issued by GMO-Z.com Trust Company (GMO Trust), a New York-chartered limited purpose trust company regulated by the New York State Department of Financial Services and part of Japan's GMO Internet Group. Stablecoins of this type are designed to track a reference currency at a fixed rate, and the token's listing on Coinbase in November 2021 made it one of the first Japanese yen-backed stablecoins available on a major United States cryptocurrency exchange.

Shortly after its debut, GYEN experienced a sharp price spike, briefly trading far above its intended yen peg amid limited circulating supply before falling below it — a deviation that ran counter to the fixed-rate design such tokens are meant to deliver. Coinbase temporarily paused GYEN trading during the episode. Customers who acquired the token during the volatility subsequently brought claims against Coinbase over the 2021 price spike.

Under the planned auto-conversion, remaining GYEN holdings on the platform will be swapped into USDC, the US dollar-pegged stablecoin issued by Circle, replacing customers' yen-pegged balances with a dollar-pegged asset. The conversion closes a loop that opened in November 2021, when GYEN arrived on Coinbase as one of the first yen-backed stablecoins on a major US exchange.

The legal aftermath of the 2021 incident remains open. Per the update above, claims against Coinbase stemming from the price spike were moved to arbitration in January 2023 and have not been resolved. GMO Trust, for its part, entered a $6.75 million settlement that it contested and that included no finding of wrongdoing. With the October 30 conversion deadline in place, the completed swap and the still-unresolved arbitration frame what remains to watch in the GYEN episode.

This content was first published on COINOTAG: https://en.coinotag.com/coinbase-auto-converts-gyen-balances-usdc-october-30