USDC vs USDT: Which Stablecoin Is Better?

Making another swap of BTC to USDT, one may doubt whether this stablecoin is worthy of trust. Indeed, being the most popular digital dollar, this isn’t the only solution on the market. That’s why we decided to tell you more about its main competitor and finally figure out which coin is a better option.

The Concept of a Stablecoin

Stablecoins are cryptocurrencies that have zero volatility. One stablecoin is always one unit of fiat currency it is pegged to (dollar, euro, etc). In the crypto market, we tend to use coins pegged to one dollar. 

These assets help us see the actual price of a particular token in dollars, hold our funds with no risk to their value, and make transactions in a familiar to all manner (as if we used fiat money).

USDT vs USDC Comparison

The choice of a stablecoin is very crucial because they aren’t issued by the FED, and consequently, we trust our real dollars to a third company for some tokens. Also, these coins serve as a storage of value; therefore, we can’t let them drop in price.

As of today, the two most popular digital dollars are USDT and USDC, but what are the differences between them? We recommend you read this USDT vs USDC comparison to find out.

What Is USDT?

USD Tether (USDT) is a cryptocurrency issued by Tether. Each USDT token is pegged to the US dollar, which is held in Tether Limited’s reserve balance, and can be withdrawn through the Tether platform. Tether has been issued on the Omni, Ethereum, Tron, EOS, Polkadot, and Algorand blockchains.

Tether uses an alternative to the Proof of Solvency consensus algorithm — Proof of Reserves. The process is simple: the amount of tokens is verified on the blockchain using publicly available tools, and the corresponding amount of dollar reserves is confirmed by bank accounts and periodic audits.

It should be noted that tokens are issued only in the amount the equivalent of which was received on the company’s account. Accordingly, the token disappears from circulation in exactly the same way.

The token issued by Tether takes third place in the crypto ranking with a market cap inferior only to BTC and ETH.

What Is USDC?

USD Coin (USDC) is a collaboration between 2 companies: Coinbase and Circle. However, the development of the cryptocurrency was carried out by their subsidiary Center Consortium.

The creators of the digital currency did not use their blockchain to work, so they took the Ethereum platform as a base. All USDC tokens are issued under the ERC-20 standard. This allowed the team of developers to reduce the cost of creating new software and networks. The token works with all classic wallets that support the Ethereum blockchain.

The token is open source. It is mainly used for payments and financial transactions in smart contracts. One of the main directions of USDC is openness and accountability through fixed governance standards.

Main Differences Between USDT & USDC

How to Make the Best Choice?

Now it comes clear that both stablecoins are well worth your attention. However, the choice of the final winner should be individual.

USDT is a less transparent but very popular asset whose trading volume exceeds the one of USDC by 14 times. So, if you want to take advantage of high liquidity pools and support on all existing platforms, Tether is your best bet.

At the same time, if you just want to hold your dollars in a cold wallet for a long time, your primary goal is to store the value, and you don’t care which exchanges support it — then you should 100% opt for USDC.