USDT
What is USDT?
USDT or Tether was the earliest stablecoins issued in 2014 by Hong Kong-based company Tether Limited. The idea behind USDT was to bridge the gap between cryptocurrency and fiat currency, a goal that Tether achieved successfully. For the first time, Tether allowed crypto holders access to platform-specific, blockchain-based US dollars that had high liquidity as other cryptocurrencies (Bitcoin, Ethereum, and other crypto assets) but eliminated their price volatility.
With high liquidity and low volatility, USDT offered traders an opportunity to transfer crypto-dollars to anyone at a low cost, with increased transparency and speed. That opened unlimited possibilities for conducting all sorts of crypto-dollar transactions, including remittances, payments, and more.
As the earliest fiat-currency-backed crypto token, Tether quickly established its niche in the stablecoin ecosystem, thanks to the hundreds of cryptocurrency trading that began pairing against USDT. Even so, the early days of USDT were marred by illegal activities. For example, a security breach of Tether’s network in 2017 resulted in the theft of 30 million dollars worth of tokens. As a result, Bitfinex (Tether’s parent company) was accused of illegally soliciting $850,000 from Tether to offset the debt.
Tether Limited has since removed vulnerabilities within its system, and today, 74.7 billion USDT tokens - twice the volume of USDC tokens - are in circulation on major crypto networks, including Algorand, Bitcoin, Ethereum, Tron, and many more.
How can I use USDT?
Unlike USDC, Tether can’t be used on the Coinbase system, which limits people who prefer using the service. The upside to USDT is that it’s the most popular stablecoin with the highest circulation volume, making it the only USD-backed coin you can use for exchanges to facilitate purchases or conversions to other cryptocurrencies.
There are several benefits of using USDT. For instance, you can not only transact quickly and cheaply, but you can also earn interest on decentralized finance protocols. Besides, it allows businesses to accept cryptocurrency payments as USDT tokens valued using the USD standard. That eliminates the need to accept payments in the form of cryptocurrencies, which exposes them to high volatility risks.
Tether (USDT) vs USD Coin (USDC)
As two of the largest stablecoins, Tether (USDT) and USD Coin (USDC) are both designed to maintain a 1:1 peg with the US dollar, but they differ significantly in their level of transparency and trading volume. The choice between them often comes down to an investor's priorities regarding liquidity versus regulatory compliance.
Comparison of USDT and USDC
| Feature | Tether (USDT) | USD Coin (USDC) |
|---|---|---|
| Issuer | Tether Limited, a company incorporated in the British Virgin Islands with ties to the Bitfinex exchange. | Circle, a US-based financial technology company that is a publicly traded entity on the NYSE. |
| Launch Year | 2014 | 2018 |
| Transparency and Regulation | Lower transparency and regulatory compliance. Has faced past controversies and regulatory scrutiny over the composition of its reserves and the accuracy of its attestations. Reserve Audits: Publishes daily reserve updates and quarterly attestations, but has never completed a full, independent audit by a major accounting firm. European Union: Not authorized under the EU's Markets in Crypto-Assets (MiCA) regulation. | Higher transparency and regulatory compliance. Backed by regulated financial institutions like BlackRock and the Bank of New York Mellon. Reserve Audits: Provides monthly attestations verified by a major accounting firm and undergoes annual third-party audits for Circle. European Union: MiCA-compliant, making it a preferred choice for European customers and platforms. |
| Reserve Assets | While its reserve assets have become safer over time, historically included commercial paper and secured loans. Current reserves primarily consist of US Treasury bills, but also include other investments like precious metals and Bitcoin. | Responds to demand by backing new tokens with an equal amount of US dollars or cash equivalents. Reserves are held in segregated accounts within regulated financial institutions. |
| Trading Volume and Liquidity | Higher liquidity and trading volume. Was the first stablecoin and continues to dominate the market in trading volume, making it the standard choice for high-frequency trading. | High liquidity and trading volume. While second to USDT in volume, it has steadily gained market share and is widely available on major exchanges. |
| Use Cases | Favored for trading on exchanges, global remittances, and other applications where high liquidity is a priority. | Trusted for decentralized finance (DeFi) protocols and payment integrations with fintech platforms due to its regulatory compliance and transparency. |
| Cross-Chain Functionality | Relies on third-party protocols or wrapped versions to facilitate movement between blockchains. | Offers a proprietary Cross-Chain Transfer Protocol (CCTP) that allows for native cross-chain token transfers. |
| Notable De-Pegs | Has experienced brief de-pegging events, including a dip below $0.90 in 2018. | In March 2023, its value briefly fell to $0.87 after the failure of Silicon Valley Bank before recovering within 2 days. |
Which stablecoin should you choose?
The "best" stablecoin depends on your priorities:
- Choose USDT if: You are an active trader who needs the deepest liquidity, widest availability across exchanges, and highest trading volume, especially in a fast-paced market.
- Choose USDC if: You prioritize transparency, regulatory compliance, and a conservative reserve strategy. This makes it a more reliable choice for long-term holders, institutional investors, and for using DeFi applications where trust is paramount.
- USDT Market Cap as of 4 Oct 2025 - $176,314,099,713 - 176 B
- USDC Market Cap as of 4 Oct 2025 - $19,437,212,628 - 19 B