Robert McDougall 

January 9, 2024


USDT and USDC are the two largest stablecoins in the world, both making the top 5 cryptocurrencies in terms of market capitalization. USDT was the original stablecoin, and has been around since 2014, while USDC was created four years later in 2018. What are the differences between the two, and which one is safer?

   Key Takeaways

  • USDT has higher liquidity, suited for frequent crypto traders
  • USDC is a much safer way to store value, with monthly audits conducted on reserves
  • If you are trading often, USDT is the better choice, but if you are holding long term, USDC is preferable

Tether USD (USDT)

Tether Holdings Limited is the company that introduced the whole concept of stablecoins, back in 2014. It created Tether USD (USDT) in 2014, as a way to deal with the problem of massive volatility and huge price swings in cryptocurrency. Since then, it has grown to become the world's largest stablecoin and the third largest cryptocurrency by market capitalization (behind only Bitcoin and Ethereum).

USDT is also the world's most traded cryptocurrency, with the highest 24 hour volume, meaning it is extremely liquid, and it is supported on almost every single crypto exchange

USDT accounts are inspected by Freeh, Sporkin, and Sullivan LLP, however investors show concern as there is a lack of transparency about how often audits are conducted, and the question remains whether each USDT is backed 1 to 1 with a US dollar.


USDC was created by Circle and Coinbase in 2018. Centre Consortium governs and oversees the financial standards, and ensures there is transparency of 1 to 1 backing. For each USDC that is created, $1 USD is stored in reserve in US Dollars, or short-term US treasuries. USDC is the world's fourth largest cryptocurrency by market cap, behind BTC, ETH, and USDT.

USDC is inspected by Grant Thornton, which is a top five accounting audit company. Each month, Grant Thornton audits the USD savings accounts of USDC, and this is announced on the Circle website. This level of transparency is what gives USDC investors peace of mind.

USDT vs USDC: Which one to use?

Since USDT and USDC are both large market cap stablecoins linked to the US Dollar, you might wonder if there is any difference at all using one over the other. However, there are five main differences that you should consider before deciding to use one or the other (or both).


When we talk about reserves, we mean the financial instruments that back the stablecoin. While you may think that each USDT or USDC is linked to a single US dollar in cash, this is not the case.

USDT has just under 80% of its reserves in cash, cash equivalents, and other short-term deposits and commercial papers. The remainder is held in corporate bonds, funds, precious metals, secured loans, and other investments (including cryptocurrency).

USDC on the other hand only holds reserves in cash and short-term US government treasury bills, which are safer options than USDT's reserves. USDC also actually hold a greater amount in reserves than the amount of circulating USDC. For example, in the September 2022 report, there are 47.26 billion USDC circulating, and the US dollars held in custody accounts is over $47.47 billion. There is over $200 million excess in the reserves, which means that 1 USD Coin is always redeemable for 1 US Dollar. You can check the monthly reports yourself here, which are created by Grant Thornton, leading global accounting firm.

Transparency and Auditing

USDC is much more transparent than USDT. They have monthly audit reports created by leading accounting firm Grant Thornton, which are available for anyone to view here. It also makes it easier to follow the collateralization of USDCs that are minted by institutions. 

On the other hand, Tether's auditing is quite secretive, and they have been promising a full audit of its stablecoin reserves for five years. In fact, Tether was fined $41 million in 2021 for lying about its reserves.


The security of a stablecoin comes from 1:1 backed reserves, and regular auditing. Based on the previous two points, you can clearly see that USDC is a much safer choice than USDT. With an excess in reserves, monthly audits, and reports that are easily accessible, USD Coin is the more secure stablecoin.


Liquidity is important if you are a frequent cryptocurrency trader. Almost every crypto platform in the world supports USDT, and you can trade it against virtually any cryptocurrency. In fact, USDT is the most traded coin in the world, with the highest daily trading volume. USDC cannot compete against USDT when it comes to liquidity.


Another point of difference between the two stablecoins is the range of blockchains. There are advantages of using different blockchains, such as transaction speed, or utility. The blockchains that circulate USDT are Ethereum, Algorand, OMG, SLP, Tron, USDT Bitcoin, and EOS. USDC is more limited, with only Solana, Ethereum, and Algorand. 

The Verdict

If you are like to trade crypto frequently, then it is a good idea to use USDT, since it is widely used as a trading pair on crypto exchanges. However, if you have a large amount of USDT, it is wise to convert it to USDC if you are HODLing. USDC is audited monthly, and is backed 1:1 so you can always redeem 1 USDC for 1 US Dollar. provides all its content for informational purposes only, and this should not be taken as financial advice to buy, trade or sell cryptocurrency or use any specific exchange. Please do not use this website as investment advice, financial advice or legal advice, and each individual's needs may vary from that of the author. This post includes affiliate links with our partners who may compensate us. 

To view our privacy policy read it here.


You may also like

KCEX Review

KCEX Review

How to buy crypto without ID

How to buy crypto without ID