Stablecoins dominate over 50% of global crypto trading volume, offering a volatility-free way to transact in crypto. They’re essential for cross-border payments, DeFi operations, and stable trading pairs. USDT and USDC are the two most popular stablecoins, both pegged 1:1 to the U.S. dollar. But which one is better? Let’s dive into a detailed comparison.
What Are Stablecoins?
Stablecoins bridge traditional fiat and cryptocurrency by maintaining a stable price, typically pegged to the U.S. dollar. USDC and USDT are both pegged 1:1 to the dollar, meaning 1 coin = $1. They solve crypto’s volatility problem, making them ideal for:
- Cross-border payments: Fast, low-cost transfers.
- DeFi lending: Stable collateral for loans.
- Trading: Safe havens during market downturns.
Key benefits include no volatility, low fees, and real-time transactions.
USDC vs USDT: Key Differences
USDC Overview
Launched: 2018 by Circle and Coinbase.
Backing: Fully reserved with U.S. dollars, audited weekly by Deloitte.
Transparency: SEC-registered reserves and public disclosures.
Blockchains: Supported on 15+ networks, including Ethereum, Solana, and Polygon.
👉 Why USDC is the most transparent stablecoin
USDT Overview
Launched: 2014 by Tether (originally Realcoin).
Backing: Claims 1:1 dollar reserves but lacks frequent audits.
Liquidity: Dominates 70% of stablecoin market share.
Blockchains: Available on Omni, Tron, Ethereum, and more.
Pros:
- Widely adopted (over $100B market cap).
- High liquidity across exchanges.
Cons:
- Less transparent (past legal issues with reserves).
How to Choose Between USDT and USDC
Platform Preference:
- Coinbase favors USDC.
- Binance leans toward USDT.
Blockchain Support:
- Check which stablecoin your preferred chain supports (e.g., Solana favors USDC).
Risk Tolerance:
- USDC: Regulatory compliance and transparency.
- USDT: Flexibility and deeper liquidity.
👉 Best practices for using stablecoins
How to Use USDT or USDC
Via Exchanges
- Deposit fiat (e.g., USD) or crypto.
- Buy USDT/USDC and store in your exchange account.
With Crypto Wallets
- Transfer stablecoins to a software/hardware wallet for full control.
- Use DeFi platforms like Uniswap to swap tokens directly.
Cashing Out USDT or USDC
- Exchanges: Convert to fiat on platforms like Coinbase or Binance.
- Hybrid Banks: Revolut or Crypto.com (watch for fees).
- Acctual: Automatically cash out to bank accounts via invoicing.
Official Redemption:
- Requires large holdings (not for small users).
Risks of Stablecoins
- Centralization: Funds can theoretically be frozen by Circle/Tether.
- Depegging: Rare but possible if reserves are mismanaged.
FAQ
1. Is USDC safer than USDT?
Yes, due to its frequent audits and regulatory compliance.
2. Can I use USDT on Ethereum?
Yes, both USDT and USDC operate on Ethereum.
3. Which stablecoin has lower fees?
Fees depend on the blockchain network, not the stablecoin itself.
4. How do I store USDC securely?
Use a non-custodial wallet like MetaMask or Ledger.
5. Can stablecoins lose their peg?
Historically, both have maintained pegs, but depegging risks exist.
Get Paid in Stablecoins with Acctual
Invoice clients in USDC/USDT and receive payments directly to your wallet. Acctual’s free invoice tool simplifies crypto accounting for businesses.
Why Acctual?
- Circle Alliance partner.
- Processes $17M+ in USDC invoices globally.
Start invoicing in stablecoins today and streamline your crypto payments!