Nobody is talking about the drop in market capitalization for USD Coin (CRYPTO: USDC), and that's a problem.

Okay, that's hyperbole. Management for Coinbase Global (NASDAQ: COIN) did discuss USD Coin in its letter to shareholders in the second quarter of 2023. So it has come up. But with the company's lawsuit from the Securities and Exchange Commission (SEC), the recent billion-dollar liquidation of Bitcoin, and the scandalous cloud hanging over the industry because of FTX, it's easy to forget about USD Coin and the risk it poses to Coinbase.

To understand why USD Coin is a risk to Coinbase, allow me first to explain what it is and how it works.

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Source Fool.com