Stablecoins are USDT and USDC. Both of these stablecoins have the same value – USD. Are they equal in quality? Let us check properly.
USDC Overview
Coinbase, one the most renowned cryptocurrency exchanges and Circle Internet Financial launched USDC in 2018.
USDC was initially only available on Coinbase, but it’s now listed on many cryptocurrency exchanges.
USDC is an ERC-20 coin. It is supported on Ethereum, but it can also be used on other blockchains like Stellar, Algorand and Solana.
USD is used to back up every USDC. Each USDC circulated in the market equals 1 USD in an audited account. Regular audits ensure that there are no USDC coins on the market and no US dollars in reserve bank accounts. This is why the coin’s value remains stable regardless of what happens.
This is how the creation of USDC looks:
- A reserved bank account receives a specific amount in US dollars.
- Smart contracts allow for the creation of USDC equal amounts.
- USDC coins will be returned to the users.
Where can USDC be used?
USDC is a stablecoin that’s backed by USD. It is a cryptocurrency but has a stable value. Many institutions have accepted it as a means of payment.
USDC can be used as an ERC-20 token by any DApp that is built on Ethereum. This is why USDC is so popular in the DeFi community.
USDC offers many benefits, but there are also some drawbacks. One of its main drawbacks is the central blockchain. Circle Internet Financial manages the stablecoin and this is contrary to the core idea of cryptocurrency, decentralization.
USDT Overview
USDT (or Tether) is the first stablecoin to be launched in the world. It was launched in 2014. Since then, it has maintained a leading position on the stablecoin market. Bitfinex launched the project in 2014.
Tether has been criticized in the past for not being transparent enough over the years. Tether’s USD backing was the main concern.
Tether’s attestation report cleared up all doubts and concerns. The company provided a complete breakdown of their reserves in the report. The proof that Tether was 100% backed was also provided. The Omni Layer protocol allows you to check the stability of the Bitcoin blockchain.
Where can USDT be used?
Tether transactions are fast and almost free of fees. Tether has a high liquidity rate. USDT makes it very convenient for traders who need immediate access to funds to trade quickly. They can also secure their positions without having to leave the crypto market.
USDT supports exchanges on more blockchains than USDC (Bitcoin EOS, Ethereum Tron, OMG and SLP). USDT may be more attractive to traders depending on the trading pair.
Tether can be used as a means of exchanging money. Tether is used by many businesses for B2B payments.
USDT vs USDC – What should I buy in 2022?
The USD is the base currency for both coins. USDC and USDT are both available for trade or payments.
USDT is a coin with more liquidity. However, it has had its share of controversies. USDC, despite its lower liquidity, is considered very safe to buy.
Although both cryptocurrencies have a stable value, each stablecoin has its own companies. If a company goes bankrupt, your funds will most likely be lost.
FAQ
What’s the point of USDC?
USDC is a cryptocurrency that aims to maintain stability in an ever-changing world. USDCs are backed by USD, and their value is tied to the US Dollar.
Is USDC really backed?
Yes, USDCs are backed by USD.
Is USDC safe to use?
USDC is secure as long as the company that it comes from is doing well.
Disclaimer
Keep in mind that this information is solely based on our observations. It is only intended for informational purposes. This information does not constitute financial advice or a forecast. You are investing at your own risk in cryptocurrency because it is volatile.
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