USDT or USDC, which is better to use as a stablecoin?

Stablecoins play a special role among cryptocurrencies. Unlike traditional cryptocurrencies, which can fluctuate in price, stablecoins are pegged to a fiat currency—most often the US dollar.

This makes them a convenient and relatively stable tool for storing funds and making payments.

USDT and USDC are the leading stablecoins, but each has its own unique characteristics and advantages, which can help you make the best choice.

A little about USDT (Tether)

USDT was one of the first stablecoins, gaining immense popularity due to its accessibility and liquidity.

The token has excellent liquidity , which attracts traders when they need to quickly exchange the token for other cryptocurrencies.

• The current market capitalization of USDT is $126 billion
• Daily turnover: 246 billion dollars.
• Blockchains – Bitcoin, Ethereum, Tron, Bitcoin Liquid sidechain, EOS, Algorand, Solana

However, Tether has always faced many questions about whether its tokens are truly backed by real reserves. The company has recently taken steps toward transparency, but this still raises concerns among more conservative investors. And the icing on the cake is the ban on USDT in the European Union.

What is USDC (USD Coin)?

USDC appeared later, but from the very first days it won the trust of investors with its transparency and strict peg to the dollar.

Compared to USDT, USD Coin does offer a more transparent system: the company regularly publishes reports confirming the existence of real reserves and strives to comply with regulatory requirements.

• The current market capitalization of USDT is $37 billion
• Daily turnover: 19 billion dollars.
• Blockchains - Ethereum, Solana, Avalanche, TRON, Algorand, Stellar, Flow, Hedera, Base, and Optimism

Although USDC trails its main competitor in trading volume and market capitalization, it has established a strong position in the decentralized finance (DeFi) sector. Its high level of trust in its reserves makes it particularly attractive to DeFi platforms and investors who value regulatory security.

What to choose: USDT or USDC?

When choosing between these two stablecoins, it's important to consider personal preferences and goals. If maximum liquidity and versatility are desired, USDT is the clear favorite.

It's easily found on any exchange and is ideal for quick exchange and trading. However, Tether's transparency and regulatory compliance are questionable, so it's best to avoid holding large amounts of USDT for long periods.

For those planning to hold funds long-term and prefer transparency, USDC may be a more reliable choice. This stablecoin is actively supported by regulators and undergoes regular audits, making it attractive to those who prefer to minimize risks.

Additionally, if you live in the European Union, due to the ban on circulation, you may soon encounter problems exchanging USDT for fiat currencies. Currently, no such problems have been observed.