$USDC vs USDT: What is the difference?

Digital assets have been becoming increasingly popular over the last decade, with individuals and businesses using them for commerce, investing, and as a secure way to store funds. In recent years, a new digital asset class has gained mass adoption: stablecoins. So what is a stablecoin? Stablecoins are digital currencies backed by various reserve assets, commonly including the US dollar, gold, and other assets, offering a blend of traditional currency stability with the advantages of blockchain technology. Among the plethora of stablecoins, USD Coin (USDC) and Tether (USDT) stand out as two of the most popular and widely used options. This post covers the differences between USDC and USDT, guiding readers through their features, regulatory compliance, and overall market presence.

What is USDC?

USD Coin (USDC) is a digital dollar the value of which is tied to the US dollar. Launched in September of 2018 by the Centre consortium, a collaboration between Circle and Coinbase, USDC is designed to combine the open nature of digital dollars with the stable value of the US dollar. Its key features include full reserves of US dollars, regular auditing, and proper adherence to regulatory compliance. This approach aims to build trust among users and regulators of digital dollars alike, positioning USDC as a transparent and secure option for global transactions.

What is USDT?

Tether (USDT) is older than USDC, as one of the first stablecoins to gain widespread adoption in the digital dollar market. Created by Tether Limited in 2014, USDT is tied to the value of the US dollar, striving to maintain a 1:1 value ratio. It holds a significant position in the market due to its early entry and widespread use across various cryptocurrency exchanges. Tether has managed to maintain a strong market presence, thanks in part to its high liquidity and integration into the digital asset ecosystem.