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

Stablecoins play a special role among cryptocurrencies; unlike traditional cryptocurrencies, which can change dramatically in price, stablecoins are “tied” to fiat currency - most often to the US dollar.

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

USDT and USDC are the leaders among stablecoins, but each of them has its own characteristics and attractive sides, taking into account which you can 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.

• Current capitalization of USDT is $126 billion
• Turnover per day is 246 billion dollars.
• Blockchains – Bitcoin, Ethereum, Tron, Bitcoin Liquid sidechain, EOS, Algorand, Solana

However, there have always been many questions about Tether about whether its tokens are actually backed by real reserves. The company has recently begun to take steps towards 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 first days it won the trust of investors with its transparency and strict pegging to the dollar.

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

• Current capitalization of USDT is $37 billion
• Turnover per day is 19 billion dollars.
• Blockchains - Ethereum, Solana, Avalanche, TRON, Algorand, Stellar, Flow, Hedera, Base and Optimism

Although USDC is inferior to its main competitor in terms of trading volume and market capitalization, it has established a strong position in the decentralized finance (DeFi) sector. The high level of trust in reserves makes it especially attractive to DeFi platforms and investors who pay attention to regulatory security.

What to choose: USDT or USDC?

When choosing between these two stablecoins, it is important to consider personal preferences and goals. If you need maximum liquidity and versatility, then USDT is a clear favorite.

It is easy to find on any exchange and is great for quick exchanges and trading. However, there are questions regarding Tether from a transparency and regulatory standpoint, so it is best to avoid holding large amounts of USDT for long periods of time.

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

In addition, if you live in the European Union, then due to the circulation ban, problems may soon arise in exchanging USDT for fiat currencies, but so far no such problems have been observed.