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A stablecoin is a crypto coin whose price is pegged to another currency like the US Dollar. In this article, we’ll discuss and compare the two famous UD Dollar pegged stable coins; USDT vs USDC.
What is USDT?
USDT is a stablecoin pegged to the US dollar. This means that UDST always maintains the $1 mark and cannot go above it. It was launched in 2014 by the company Tether Limited Inc. USDT is one of the most popular stablecoins with a market cap of over $67 billion. It is the third highest after Bitcoin and Ethereum and can be traded and spent just like any crypto coin.
The stablecoin was created to solve various problems. It was launched to make national currency transactions faster and a lot more.
Read More: ALL YOU NEED TO KNOW ABOUT TETHER (USDT)
What is USDC?
Just like USDT, USDC is also a stablecoin pegged to the US Dollar. It was launched by Coinbase and Circle Internet Financial in September 2018, four months after it was announced in May 2018.
The USD coin is also quite popular, with a market cap of over $52 billion. In March 2021, it recorded a $2 billion average sent daily through the Ethereum network.
As cryptocurrency becomes multichain, USDC has expanded to more native networks, including Avalanche, Tron, Algorand, Tron, Hedera, and Solana.
Advantages of Stablecoins
- Stablecoins can be considered a bridge between cryptocurrencies and fiat currency.
- Because they are pegged to a fiat currency and usually maintain the $1 mark (like USDT), they do not usually experience volatility during trading periods, and that leads to a more reliable currency.
- Because no collateral is held on the blockchain, it is less liable to be hacked.
- It allows cryptocurrency traders to swiftly liquidate their crypto assets and enter the market once again when the price is stable.
Disadvantages of Stablecoins
- There has been the issue of stablecoins not being transparent enough. Tether (USDT) has been called out in the past for this reason concerning whether the company, Tether Limited Inc, has the right amount of reserves. They were later fined, and the US government executed regulations. A report on the company’s current reserve holdings has since been released.
- Blockchain technology’s main feature is its centralisation. Still, stablecoins are not centralised in nature, especially regarding the backing of the assets.
USDT vs USDC: What Is The Difference?
We have discussed what USDT and USDC are and the general advantages and disadvantages of stablecoins. Below is a table highlighting the contrasts between the two stablecoins.
|Blockchain Network||Ethereum, Liquid, Tezos, Kusama, Avalanche, Tron, Algorand, Polygon, EOS, Solana||Ethereum, Polygon, Avalanche, Tron, Hedera, Solana, Algorand, Flow, Stellar|
|Year of Launch||2014||2018|
|Developer||Tether Limited Inc||Centre, which was established by Circle and Coinbase|
|Auditor||Freeh Sporkin and Sullivan (a law firm)||Grant Thornton (a financial audit)|
|Frequency of audit||Unknown||Monthly basis|
|Rank in market||3rd||4th|
|Market Capitalization||$67 billion||$52 billion|
|Circulating Supply (August 2022)||67,549,664,915.427 USDT||52.13 B USDC|
USDT vs USDC: Which is a Better Investment?
We have looked at what USDT and USDC are and their differences. Now you might be wondering which one of them is a better investment.
It is shown that USDT has a higher market capalitization and trading volume. Still, interestingly, most economists may not see it as the best stablecoin. USDT is untrustworthy because of its gaps in transparency and auditing.
If you are looking to invest in a stablecoin with much more transparency, you should consider USDC. Still, if you want to invest in a stablecoin with a higher volume and liquidity, USDT is the one.
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Although they are both excellent, popular and promising stablecoins with a couple of similarities, they have their differences and advantages over each other.
To pick which stablecoin to invest in, consider your personal financial goals and select the one that aligns with them.