The USDT (Tether) and USDC (USD Coin) are the two most popular and most traded stablecoins on the crypto market today. Both coins are tethered to the US Dollar ($USD) so that 1 USDT or 1 USDC equals 1 $USD.

Stablecoins combine the best of both worlds of fiat (fancy name for regular money like the Dollar or Pound) and the blockchain. Unlike most cryptocurrencies with wildly fluctuating prices, stablecoins hold a fixed value that’s not affected by market conditions. 

And yet, with them, you can make borderless, permissionless, and lightning-fast transactions since they are exchanged on decentralized networks.

So which stablecoin is right for you? USDT or USDC? Is the USDT safe or should you start diversifying your stablecoin portfolio? 

In the rest of this piece, we discuss why you should invest in a stablecoin in the first place, the royal rumble between the USDT and USDC, and how you can buy USDC or USDT on BingX, the world’s leading social trading platform.

Let’s take a dip!

Benefits of stablecoins like the USDT and USDC?

The short answer – to protect your investments.

Stablecoins are the crypto equivalents of regular money that retain a fixed value and are not affected by market price fluctuations.

The idea behind cryptocurrencies was to create a form of digital money allowing people to store and exchange value without the need for an overseeing financial institution or bank.

But most cryptocurrencies are very volatile – i.e their prices can fluctuate very quickly in short periods of time, sometimes, by the minute.

That’s where stablecoins like the USDC and USDT come in.

So, if you are looking to save in crypto and don’t want to risk losing your money, stablecoins like the USDT and USDC are your best bet.

And even if you are a spot trader, stablecoins offer you a safety net or help you ‘catch your breath’ when you want to take a break.

You can convert your regular coins to stablecoin and be sure that even after a year, the 10,000 USDT worth $10,000 you had in your wallet in 2022 will be exactly worth $10,000 in 2023.

USDC vs USDT – Which is the best crypto dollar?

USDT and USDC are both stablecoins that hold the same value as the U.S. Dollar but different investors lean towards one of the two coins as the ‘best crypto dollar’ thanks to a number of key differences and their histories.

Even though the USDT is the more widely traded stablecoin, some controversies surround the coin making many investors confident that USDC is the more secure crypto dollar. 

We’ll now discuss each coin in a little detail, so you too can decide.

USDT (Tether) – Everything you should know

USDT market cap

Tether or the USDT coin was created in 2014 by Tether Ltd. to maintain a 1:1 ratio with the U.S. Dollar. It is currently the most traded stablecoin with a market cap of $68 billion at the time of this writing.

Tether Ltd. claims that to maintain the value of 1 USDT at $1USD, for every USDT token issued on an exchange, there is $1 in a Tether bank account in the federal reserve. 

Most stablecoins work this way. This ensures that whenever a user wants to redeem their USDT for USD, Tether will be able to deliver. 

The Tether (USDT) controversy

But it’s not all been roses and rainbows for the USDT. Many investors have raised concerns over whether Tether Ltd. actually has enough reserve cash to redeem the total number of USDT in circulation.

And the uneasiness has been fueled by the fact that the company has not seemed eager to do a financial audit.

Another point USDT critics make is that only a small portion of the assets used to back the USDT was actual cash, and the company was relying on less secure financial assets like commercial papers and loans.

But there’s good news

In July 2022, Tether announced its partnership with accounting firm BDO Italia to carry out quarterly attestations to prove the validity of its fiat reserves – even though these are still not as thorough as audits. 

Tether also continues to reduce the percentage of papers in its reserve and increase its fiat.

USDC (USD Coin) – Everything you should know

USDC market cap

The USD Coin or USDC was created by crypto companies Coinbase and Circle in 2018 as a ‘crypto dollar’ also pegged to the U.S. Dollar. USDC has a market cap of $46.8 billion at the time of this writing. In fact, in June 2022, USDC overtook Tether in trading volume on the Ethereum network.

The USDC was built on the Ethereum blockchain to inherit the support for smart contracts and allows developers to contribute to the project’s code and use it for their own projects. This also contributes to the USDC cross-chain compatibility.

USDC – The more transparent stablecoin

Unlike the USDT managed by just one company, the USDC is managed by Centre, a consortium of its founding companies Coinbase and Circle, and other companies with a major share in the company.

Like USDT issuer Tether, Circle claims that it has cash reserves and other USD-dominated assets in several segregated accounts maintained by reputable financial institutions in the U.S. 

However, a key win for the USDC is that reports validating these reserves are provided monthly and Circle also files annual audit statements with SEC. Also, USDC reserves are cash-only and cash-equivalent U.S bonds, making investors believe it is the safer option of the two coins.

USDC issuer Circle is going public; Tether doesn’t plan to

Another major difference between both companies is in their plans on going public. 

USDC issuer Circle plans to go public in December 2022. What this means is that the company becomes accountable to more shareholders and to win their interest, the company is very likely to provide detailed audit reports.

USDT’s parent company, Tether, on the other hand, doesn’t plan to go public. This also means that they are less obligated to be transparent and have fewer eyes on them.

So USDT or USDC – which stablecoin should you buy?

The long and short of it – investors are more confident in the USDC as its parent companies have been very compliant with scheduled audits that prove that they have enough cash reserves to back the coin.

On the other side of the ring, in spite of the controversies and critique, the USDT is still the most widely used stablecoin, thanks to its first-in-the-game privilege.

But the USDC is catching up and grew much quicker in a shorter time frame. While some traders are choosing one of the two, other investors are converting some of their USDT to USDC to diversify their stablecoin portfolios!

Buy USDT and USDC on BingX

You can buy USDT with your credit card directly on BingX, the world’s leading social trading platform. To add USDC into your wallet, you can buy USDT and then convert it to USDC or receive USDC from other USDC hodlers via our P2P network.

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