USDT vs USDC: What Is The Difference?

USDT and USDC: how often do people come across these crypto abbreviations? They really became the “kings” among all stablecoins. In this article, we explore what cryptocurrency is the best to use, what factors we should pay attention to and what is the difference between USDT and USDC. Let’s see!

The Fundamental Understanding of USDT and USDC

USDT (Tether) and USDC (USD Coin) are the most famous stablecoins pegged to the US dollar in a 1:1 ratio, so the rate of these tokens is equal to 1 dollar. Both Tether and USD Coin lead by a wide margin among many other cryptocurrencies in terms of capitalization and trading volume in monthly and daily terms.

These outstanding stablecoins bridge the gap between crypto and fiat currencies. Thanks to them, investors can trade against the US dollar without experiencing the problems associated with the volatility of regular cryptocurrencies. Additionally, crypto-enthusiasts get the opportunity to conduct fast and reliable transactions on the blockchain using USDT or USDC.

So, we've already understood the basic specifics of these two stablecoins, and now we’re ready to start our comprehensive analysis.

USDT vs. USDC: What Are The Key Similarities?

There is a lot of talk about differences between USDT vs USDC, but in order to analyze the differences qualitatively, you need first to understand the similarities as well. There are a few key similarities that bring these ones closer together.

  • Similar types of tokens.

USDT and USDC are both stablecoins, which aim to maintain the stability of their price, which is pegged to the US dollar or euro. Stablecoins are a type of cryptocurrency that, unlike Bitcoin or Ethereum, have a fixed binding of their value to traditional financial assets. It’s the stability and predictability of the exchange rate that makes them an indispensable tool for storing and trading crypto assets. USDT and USDC are the most popular among all kinds of stablecoins.

  • Common purpose.

The main idea of stablecoins is to provide the cryptocurrency market’s users with the opportunity to use a stable digital asset, the rate of which is tied to the US dollar exchange rate and does not experience such intense volatility as other cryptocurrencies may do.

  • Similar applications and support.

Both tokens can be used to purchase cryptocurrencies and other assets on cryptocurrency exchanges. Also, they are perfect for storing, trading, and investing due to their price stability. Additionally, USDT and USDC are supported on different crypto exchanges and gateways.

It’s possible to work with these stablecoins on Cryptomus payment gateway, too. You just need to log in or sign up on the website to use your own USDC or USDT wallet. If you don't have one, then choose your preferable cryptocurrency in which you want to store your assets and try to integrate USDT and USDC for your personal purposes or business. With our reliable help, it is much easier than it seems.

As we can see, these popular stablecoins have a lot in common but nothing can be so simple. USDT and USDC are absolutely not the same things. To make sure of it, let’s explore their differences further.

USD Coin vs. Tether: What Are The Key Differences?

What is the difference between USDC and USDT? No matter how similar these two coins are in name, type, or other characteristics, they still have significant differences that must always be kept in mind.

Transparency and control issues, ways of providing price stability, release time and their issued blockchains are the key differences between USDT and USDC tokens.

Now, let’s get into these aspects a little bit closer.

As for the control and transparency issue, Tether Limited produces USDT and covers all the control of its management so no third parties can influence the management and distribution. In the case of USDC, from the very beginning, the CENTRE's activities were under the constant control and regulation of the US authorities and banks. Therefore, it significantly increases the confidence and demand of investors and financial regulators in the USDC.

If we speak about the maintaining of the price stability, then the USDT functioning uses a reserve system where each token is backed by financial reserves in US dollars or other assets that the company itself controls. The USDC uses a "capital control" system where each token is backed by US dollar assets held in bank accounts. It makes the USDC system more transparent and more precise reporting.

USDT vs USDC: What is The Difference?

The last but not the least difference is about their release time. USDT is the first stablecoin to be widely distributed and was created in 2014 by Tether Limited, so that’s why USDT is also called Tether. The USD Coin, appeared in 2018. It was created by the CENTRE consortium, which includes two large American companies from the field of cryptocurrencies — Coinbase and Circle.

Moreover, they are issued on different blockchain networks. USDC is an ERC-20 token issued on the Ethereum blockchain, while USDT is issued on multiple blockchains including Ethereum (ERC-20), Tron, and others.

To sum up, USDT and USDC truly have a lot in common as well as the significant differences in regulation and security aspects, native issued blockchains and methods of providing price stability. So, in order not to make a fatal mistake while choosing between them, pay much attention to all the nuances of the specific token.

USDT vs. USDC: Commission Aspect

Topic devoted to transaction fees always remains the essential one, especially in the case of crypto. USDT and USDC fees aren’t an exception but now we want to tell you about their gas and transfer fees in more detail.

In the case of gas fees which are the ones paid for transactions on the Ethereum blockchain, USDT provides cheaper gas fees compared to USDC because it involves a wider network due to the CENTRE consortium participation.

However, it's crucial to note that gas fees can vary depending on network congestion and other factors, so the difference in gas fees between USDC and USDT may not always be significant.

What is about transfer fees for these stablecoins, they are negligible for both. But in most cases, USDC tends to be cheaper to transfer than USDT. It’s also essential to notice that some platforms may have minimum transfer amounts for USDC or USDT, and failing to meet these minimums could result in additional fees or restrictions.

Basically, the formation of transfer fees for USDT and USDC depends on the specific service you choose to store and manage your digital assets, so check all conditions and terms of using the provider in advance to avoid unpleasant surprises.

USDT vs. USDC: Which Is Safer?

If you had to choose between USDT and USDC, which of them would be safer? Security is the main issue in any deal, mainly if it’s devoted to cryptocurrency. What's the difference between USDС and USDТ in the security issue? Let’s check!

From the security and reliability point, USDT periodically had questions due to the opacity of the structure of Tether's reserves. As we’ve already mentioned about USDT, it’s fully controlled by its mother company, Tether Limited, so this raises some transparency and security issues to solve. However, it still remains a stablecoin despite some problems with reserves, which directly relate to the company's policy.

USDC, on the contrary, has a more transparent support system and clarity, which is more attractive for users in some cases. Additionally, the USDC publishes monthly audit reports confirming the availability of full dollar coverage.

All in all, we can say that USDC is relatively safer than its predecessor, USDT. It’s confirmed both by the well-coordinated functioning of the USD Coin itself and the presence of a transparent support system.

Don’t forget to explore and check all possible risks before starting to work with any cryptocurrency. In a battle between Tether vs. USD Coin, do research and choose a suitable and reliable stablecoin for yourself.

USDC vs USDT: Which Stablecoin Is Better?

USD Coin and Tether are the most popular among stablecoins worldwide, but what made them so special? We’ve discussed the similarities and differences of these stablecoins, now let's examine what pros and cons USDT and USDC have.

  • USDT

Benefits: USDT has the highest liquidity, a larger market capitalization and is more widely accepted by exchanges, which can make it easier to trade and invest. Furthermore, it’s well-known for fast and low cost transactions while working with it. When interacting with the coin, users also praise the ease of use for trading and storage.

Drawbacks: It needs to be said about insufficient transparency of the reserve structure and lack of regular audits by third parties, which we’ve mentioned earlier. Also there is a problem with the absolute dependence of USDT on the policy of the issuing company. Consequently, this creates a potential risk of depreciation in case of problems with the provision of reserves.

  • USDC

Benefits: USDC, compared to Tether, provides high reliability of reserves, confirmed by regular audits. Moreover, there is support from legal entities and state-owned banks, which also causes additional trust from some users in investing and trading using the USDC.

Drawbacks: USDC has lower liquidity than USDT, which makes it less affordable and convenient to use. Also, compared to USDT, there is less prevalence among cryptocurrency users.

To sum up, in the crypto efficiency issue USDT is better than any other crypto of this type including USDC. But if the safety is higher than efficiency for you, then we advise you to take a closer look at USDC.

Tips to Make a Right Choice Between USDT and USDC

Battle for leadership between USDC and USDT is a topic which more and more users are interested in. How to make the right choice and choose the stablecoin that will be convenient to use and bring benefits in the future? Here are some tips to help you.

  • Define the goals and objectives that you want to solve with the help of USDT and USDC.

  • Analyze your priorities for security and transparency devoted to these stablecoins.

  • Read more about the liquidity option for both coins.

  • Find and use only reputable and reliable crypto exchanges and gateways that support Tether and USD Coin.

  • Check information about transaction fees, conditions, and terms of use.

That’s all for now! We hope that after reading, your choice between these two popular stablecoins will be easier and faster. Choose your favorite stablecoin together with Cryptomus!

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