What is USDT?
USDT is a stablecoin issued by Hong-Kong based crypto enterprise named iFinex. The same company also runs BitFinex exchange. USDT or Tether is pegged 1:1 with USD. It means that a USDT holder can redeem the same amount of USD in equal proportion for their USDT reserves.
Tether reserves consist of fiat currencies and US Treasury products. The reserves are spread across 4 banks, 2 gold depositories, one gold broker, BitFinex exchange, and two investment management firms as per Coindesk.
USDT is a stablecoin which retains a permanent value of 1 dollar per unit. As a stablecoin it is used for buying and selling.
What is USDC?
USDC is also a stablecoin. It is issued and backed by Circle Internet Financial. USDC is also backed by USD and it was created to enable faster crypto transactions. USDC is redeemable at 1:1 ratio with USD.
Circle, the issuer of USDC has made the backing reserves for the project transparent to ensure that it is fully collateralized. Circle publishes monthly auditing reports on its website and attestation to ensure trust.
Similarities Between USDT and USDC
Here are some important similar attributes of USDT and USDC given as under:
Both USDT and USDC are types of stablecoins that are backed by USD. There are many types of stablecoins based on their backing pegs. Some are pegged to other cryptocurrencies or commodities.
However, both stablecoin in this instance are backed by dollar and they consist of similar type of reserves namely short-term treasury products, cash deposits, and fiat currencies.
Both USDT and USDC are redeemable at 1:1 ratio with USD. It means that investors who held one unit of either stablecoins can represent the same value of dollar.
USDC and USDT have been listed on major cryptocurrency exchanges and trading platforms. USDC is listed at exchange. USDC is listed on Binance, Bybit, Coinbase, and Crypto.com. Meanwhile, USDT is listed on Binance, Huobi, Bybit, Gate.io, OKX, and Bitget.
Both USDT and USDC conduct and post regular audit reports to ensure that their stablecoins are fully backed. The stablecoin issuers make a point in ensuring transparency for their investors. However, USDC has been more consistent with their audit reports while USDT has faced some controversies on the matter.
USDC and USDT have implemented ERC-20 token standard. It means that both stablecoins are hosted on Ethereum blockchain.
USDT and USDC are expanding to other blockchain networks. It means that both stablecoins are becoming multi-chain projects. USDC is a joint venture with Coinbase that has announced expansion to 6 new blockchains this month.
USDT and USDC are stablecoins which means that they are used as a mode of payment for products and services online. At the same time, they are also used for conserving crypto profits and to perform fiat exchanges.
Differences Between USDT and USDC
Here are some important distinctions between USDT and USDC stablecoins:
- USDT is issued by Tether based in Hong Kong and USDC is backed by Circle and Coinbase.
- The total market cap of USDC stands at $25 billion and the same metric for USDT is around $82 billion.
- The launch year for USDT is 2014 and USDC made its debut in 2018.
- USDT is audited by Sporkin, LLP, Freeh, and Sullivan and the auditing firm for USDC for Grant Thorton.
Stablecoins bring a lot of value and utility to the crypto markets. Therefore, there is an increasing amount of traction and competition in this sector.
At the same time, stablecoins have sparked a conversation regarding its regulations among legislatures. USDT and USDC are two major and reliable stablecoin projects in the virtual currency market.