USDC and USDT are both leasing stablecoins. They are nothing but cryptocurrencies that are pegged to a fiat currency – the US Dollar. Stablecoins are used by investors to avoid price swings and currency fluctuations. Stablecoins are less volatile in nature as they maintain a fixed ratio of 1:1 to the $USD.
There are a number of stablecoins out in the market, but USDC and USDT are highest in trading volume. However, on the basis of functionality, they are all virtually the same, backed by different companies.
USDT: By Tether
USDT stands for US Dollar Tether, or commonly known as Tether plainly. It was the first ever stable coin issued by Tether Limited, a Hong Kong based company in 2014. It helped bridge the gap between crypto and fiat while enabling high liquidity and on paper negligible volatility.
Tether is the most popular stable coin standing at a market capitalization of $76 billion and 4th highest in order of the same. It has the highest trading volumes as well over other stable coins. 1 USDT by theory is always equal to $1, making it a stable coin enjoying barely any noticeable price fluctuations.
However there are controversies surrounding Tether. Tether claimed that it has enough reserves to back every token, while in fact they did not for most of the time. This is a dangerous situation for investors to be in.
You can buy USDT on our platform here!
USDC: By Coinbase and Circle
USDC is another such stablecoin with its priced at $1. It was created by Coinbase and Circle first in 2018. USDC is considered better governed that USDT. It is managed by a consortium known as Centre. Centre is founded by Circle, its board includes members from Coinbase and Bitcoin mining company Bitmain.
It is 2 ranks behind USDT in order of market capitalization as it stands at #6. It has a market cap of $42 billion. We can conclude that USDC is in fact more transparent and trustable than USDT. It provides more transparent auditing and funding processes comparatively. USDC gives high priority to the proper governance of the coin and follows all regulatory standards.
However, Circle is currently being investigated by the SEC. Circle is in full and transparent cooperation. The SEC even threatened to sue Coinbase. Read all about it here on last week’s blog.
Concluding Thoughts
USDC is more transparent and well governed. However users who are trading in large volumes who don’t have many concerns prefer USDT. Remember, it is important to do your research before investing or trading! We aim to help you with the tools and research needed to make the best decisions through our blog.
