USDT vs USDC: Which one to choose in 2024?

The stablecoin market has reached a total market capitalization of 173.5 billion USD, with daily trading volumes exceeding 44.8 billion. Among the 176 existing stablecoins, two clearly dominate: USDT and USDC.

The Dominating Outsider: USDT

Launched in 2014 by Tether, USDT has established itself as the most traded stablecoin in the world. With a market capitalization exceeding 120 billion USD, it represents the 3rd largest digital asset globally.

But this pioneer has a heavy past. In 2021, the CFTC fined Tether 41 million USD for misleading statements about its reserves. Tether's quarterly reports still lack transparency compared to its competitors.

Highlights: Maximum liquidity, available on 16 blockchains (Ethereum, Tron, Solana…), almost instantaneous transactions on Tron (less than a cent), massive integration into DeFi.

Weak points: Less detailed audits, reserves composed of various assets (not just US Treasury), high redemption threshold (100k$).

The transparent challenger: USDC

Circle and Coinbase launched USDC in 2018 with a clear promise: compliance first. The result? Independent monthly audits, 100% cash reserves, and short-term Treasury bonds.

With a market capitalization of over 35 billion, USDC is gaining traction among institutions and demanding users regarding governance.

Highlights: Verified monthly reports, simple and transparent reserves, accessible refunds for small investors, rigorous regulatory support.

Weaknesses: Liquidity lower than USDT, available on 15 blockchains ( a bit less ), lower trading volume, peg loss incident in 2023 ( SVB crisis ).

The direct match

Who for what?

Take USDT if: You are actively trading altcoins, you are looking for the best possible liquidity, you regularly use Tron or Solana to minimize fees.

Take USDC if: You prioritize regulatory security, you are doing long-term hodling, you have a small portfolio, you prefer to sleep at night without worrying.

The real risk

Both share the same Achilles' heel: regulatory scrutiny. A tightening of US rules on stablecoins could impact both. The USDC, better aligned with regulators, would be less affected. The USDT? We'll see.

Both also briefly lost their peg during market shocks (USDC at $0.90 in 2023, USDT at -2% in August 2023). Rare, but it happens.