What is the difference between USDC and USDT?

Whilst many focus on the meteoric rise of notorious cryptocurrencies like Bitcoin and Ethereum and their infamous value increases; there is a quieter, less volatile but equally as impactful competitor in the quest for decentralized finance to take the reins from its traditional counterpart. 

We may still be early in the cryptocurrency adoption curve, but we have come a long way from the early days in which investors would be forced to trade their money back to their native currency should they want to avoid the market price fluctuations. With the introduction of stablecoins that are pegged to the value of the US Dollar or another asset, the usability of the decentralized finance ecosystem has increased enormously and the gap between traditional finance markets and DeFi has narrowed. 

The ability to reduce volatility and use assets pegged to a stable asset led to what became known as ‘DeFi summer’ in 2020, and since then the market capitalization of stablecoins has rocketed, hitting $182b at the time of writing according to figures calculated by The Block, which is up from $61b in March ‘21. 

This acceleration of growth in stablecoin market capitalization is in large part due to almost instant transaction speeds, 24/7 availability and price stability; and given that, people are turning to stablecoins to take advantage of DeFi protocols that make it possible to earn interest on deposited funds at higher rates of interest than at high street banks.


  1. What is USDT
  2. How can I use USDT
  3. Tether Controversy
  4. Is USDT Safe
  5. What is USDC
  6. How can I use USDC
  7. Which is safer, USDT or USDC
  8. Is USDT or USDC better
  9. Buy crypto with Apple Pay

With many stablecoins available to choose from, it can be difficult to know which is the best to use. Firstly, check out our blog to learn about the different types of stablecoins and how they work. USDT and USDC are the two most popular stablecoins by market capitalization, and therefore you might be wondering – which is better, USDT or USDC?

What is USDT

USDT is a stablecoin issued by Tether and is an ERC-20 token on the Ethereum blockchain, but is also supported on other chains. Tether created USDT in 2014 to bridge the gap between volatile cryptocurrencies and fiat, paving the way for cryptocurrencies to be utilised more easily in traditional finance applications such as cross-border payments, remittances, saving, lending and more. In their creation of USDT, Tether provided an option that had all of the technical benefits of cryptocurrencies including the 24/7 permissionless availability, fast and low cost transaction fees and high liquidity, without the risk of price fluctuations. Following its implementation, exchanges quickly released USDT trading pairs and as it had first mover advantage, it is the market’s most common trading pair.

How can I use USDT

As the most common trading pair, USDT is therefore often used in that capacity on both centralized and decentralized exchanges. If traders expect volatility in the crypto markets, they’ll trade their crypto into stablecoins to protect their funds through that period. Stablecoins are commonly used to partake in similar activities as you’re used to in the traditional finance world, such as lending and holding to earn interest. You can use both USDT and USDC for these, so learning about the slight differences and which suits you best is important.

Tether Controversy

Tether was fined $41 million by the US Commodities Futures Trading Commission in October ‘21 for allegedly misstating its reserves, following the New York Attorney General’s office settling charges relating to financial mismanagement with Bitfinex and Tether in February ‘21. 

Tether had originally stated that it had cash reserves equal in value to the stablecoins it issued, meaning that each USDT would be backed by one dollar held in reserve. This was found to be untrue, with Tether releasing a pie chart following the ruling with a breakdown of the assets held in reserve, showing only 3.87% was held in cash.

Is USDT Safe

Given the controversy surrounding Tether, it is reasonable to have concerns as to whether USDT and other stablecoins are safe. Cryptocurrencies and stablecoins are not regulated at present, so you’re not covered by consumer protections when using them like you would be with a traditional bank. There’s no central body to complain to should something go wrong, and with USDT not being backed solely by cash there is a question of how easily you would be able to transfer your funds in to fiat should there be a ‘bank run’ where we would see a lot of people wanting to switch their USDT into cash. 

It is always wise to be cautious and take a proactive approach to managing your exposure to risk. A good way to do this is by learning about how to allocate your crypto portfolio and being aware of the different risks each type of investment exposes you to.

What is USDC

USDC was launched in 2018 and is managed by Centre, which is a consortium co-founded by cryptocurrency exchange Coinbase and Circle. It is pegged to the value of the US dollar and each USDC is backed by one dollar or the equivalent in short term debt, which is held in accounts with US regulated financial institutions. USDC is an ERC-20 token on the Ethereum blockchain, but is also supported on other chains. 

How can I use USDC

USDC is available on most cryptocurrency exchanges and can be used as an option to transfer more volatile cryptocurrencies into to protect from price volatility. USDC can also be used in decentralized finance protocols to deposit and earn interest on, similar to how you’d deposit your native currency into a savings account. With Minke, you can buy USDC and then deposit it into Aave via the app in just a few clicks, letting you earn interest on your savings. 

USDC is used by institutions such as Visa to settle transactions and is becoming commonly used by web 3.0 companies to issue wages to their employees.

Which is safer, USDT or USDC?

Whilst USDT is the option more often used for trading and payments, USDC is thought of as a safer option due to Centre Consortium’s willingness to comply with government regulations and provide greater transparency regarding their reserves. Whilst Tether provides irregular attestations relating to the assets backing USDT, Grant Thornton LLP issues attestations each month on the US dollar denominated reserves that back the USDC tokens in circulation. As Centre has been proactive in planning for incoming regulations, they are potentially a safer stablecoin for you to use. 

Is USDT or USDC better?

As with all cryptocurrencies, this depends on what you want to use the token for and your risk tolerance. You might find that an exchange you want to use only trades USDT and therefore you will be limited. If you’re looking to earn interest on your tokens, you might go with whichever has a higher interest rate from the provider you are using. If you are basing your decision on risk and potential downside, you may choose to use USDC given their transparency and commitment to deal with regulators proactively. Ultimately, the decision is yours and it is wise to research your investment options carefully. 

Buy crypto with Apple Pay

At Minke, we allow you to buy USDC with Apple Pay and invest it into popular DeFi protocols via our app in just a few clicks. You can check us out here https://www.minke.app/

Your capital is at risk when you invest.

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