USDC vs USDT: what’s the difference and which one should you use?

Choosing between USDC and USDT is a common question among stablecoin users, especially as cryptocurrencies are increasingly used to save money, send funds, and hedge against inflation. Both are digital currencies pegged to the US dollar—but they don’t work the same way, nor do they offer the same levels of transparency or stability.

Below is a clear, practical comparison designed for people who use these digital dollars in everyday life.

What Is USDT?

USDT (Tether) is the stablecoin with the largest market capitalization and the most actively traded digital currency in the world after Bitcoin. Its main advantage is liquidity, which makes it especially attractive for arbitrage and trading.

Key characteristics:

• Issued by Tether Limited.
• Pegged 1:1 to the US dollar.
• Backed by a mix of different financial assets.
• Available on very low-cost networks like Tron, enabling fast and inexpensive transactions.
• Widely used across Binance, decentralized exchanges, and global crypto markets.

While USDT is extremely popular, it has faced ongoing scrutiny over the years due to limited transparency and the absence of fully comprehensive audits. This has increased the perceived risk for some users when compared to USDC.

What Is USDC?

USDC is a stablecoin issued by Circle, backed 1:1 by US dollars held in liquid reserves. It stands out for its regulated approach, regular audits, and practical use in payments, remittances, and digital transactions.

Thanks to its transparency and compliance with US financial regulations, USDC is widely used by fintech companies, neobanks, and digital money platforms. It operates on major networks such as Ethereum, Solana, and Base.

Learn more details in our complete guide on what USDC is.

USDT vs. USDC: Which One Is Better?

The choice between USDC and USDT depends on what you value most: stability, liquidity, or network costs.

USDC and USDT are the two most widely used stablecoins in the world, but each excels in different areas. There is no single “best” option in absolute terms—each stablecoin offers distinct advantages depending on how you plan to use it.

If you prioritize stability and transparency, USDC is often the preferred choice. It is backed by audited reserves and functions as a digital version of the US dollar, making it ideal for saving, sending money, or paying for services with regulatory clarity.

If you are looking for global liquidity for trading, USDT dominates across most exchanges and is well suited for moving large volumes or engaging in arbitrage.

In short:

• For saving, payments, or remittances: USDC.
• For trading and high-volume operations: USDT.
• For fast and low-cost transactions: this depends more on the network (Solana, Base, Tron, Binance Smart Chain) than on the stablecoin itself.

USDC vs. USDT: What Are the Key Differences?

Here are the most important differences between the two stablecoins, explained in simple terms:

Transparency and Audits

USDC publishes monthly audited reports on its reserves, allowing users to verify that each token is backed by US dollars or equivalent assets. These are part of Circle’s transparency policies.

USDT also publishes reports, but it has historically faced questions around the composition and verification of its reserves. This has increased the perceived risk for users who prioritize full clarity. You can review Tether’s transparency policies for more detail.

Liquidity and Market Capitalization

USDT is the largest stablecoin in the world by market capitalization and crypto trading volume. For this reason, it is often the preferred option for trading and high-volume operations.

USDC, on the other hand, also offers strong liquidity but with a greater focus on payments, remittances, and everyday use.

Price Stability and Backing

USDC maintains a very stable 1:1 peg to the US dollar, supported by reserves made up of cash and US Treasury bonds. As a result, it is considered the largest regulated stablecoin in the world.

USDT also maintains its dollar peg, but because its reserves are more diversified, it has occasionally experienced brief fluctuations during periods of uncertainty, sometimes moving a few cents off parity.

Regulatory Compliance

USDC is generally perceived as one of the stablecoins most closely aligned with US regulation. Its issuer, Circle, in partnership with Coinbase, operates under US money transmission laws. This regulatory approach gives USDC greater clarity and operational consistency from the end user’s perspective.

USDT, by contrast, operates under more flexible regulatory frameworks, although it has increased its transparency efforts in recent years.

Costs and Networks: USDC vs. USDT

Transaction costs depend more on the blockchain network than on the stablecoin itself. These are the main characteristics of each network:

• Tron (TRC-20): Very low fees, especially popular for USDT, making it ideal for traders and frequent transfers.
• Ethereum: High security, but often high fees for both stablecoins during periods of network congestion.
• Solana: Extremely fast and low-cost for both USDC and USDT.
• Base: A modern, accessible network with low fees, particularly popular for USDC. This is the network used by the Kontigo app.
• Other EVM networks: Generally offer moderate fees, which vary depending on network demand.

In general, if your goal is to send money with minimal costs, Solana, Tron, or Base tend to be the most convenient options.

Self-Custody and User Control

• Security doesn’t depend only on the stablecoin. It also depends on how you store it.
• A digital wallet that uses MPC (Multi-Party Computation) technology splits and protects private keys, adding an extra layer of security against theft, loss, or unauthorized access. This approach helps reduce risk without relying on seed phrases or centralized intermediaries.

Guide to Choose | USDC or USDT Based on Your Needs: A Practical Guide to Choosing

• ✔ If you want to save or send money and later withdraw it to your bank account: USDC offers greater regulatory clarity and verifiable reserves.
• ✔ If you send money frequently: Both work well, but USDC on low-cost networks provides added stability and trust.
• ✔ If you receive international income: USDC is more widely adopted by platforms that prioritize regulatory alignment and compliance.
• ✔ If you trade or do arbitrage: USDT remains the dominant currency in terms of volume and market presence.
• ✔ If you use digital dollars in everyday life: USDC delivers an experience closer to a true “digital dollar,” thanks to its payment-oriented design.

In short, USDC and USDT serve the same core purpose: offering a stable digital dollar within the crypto market. The difference lies in how they do it.

What truly matters is using these stablecoins within an infrastructure that protects your assets and lets you manage them easily and confidently.

What Do Kontigo Users Prefer?

On Kontigo, users tend to prefer USDC when they’re looking for stability, clear reserve backing, and an easy way to manage digital dollars. That said, the app supports both stablecoins: USDC and USDT.

Its MPC self-custody technology allows users to retain full control over their assets without exposing private keys. On top of that, the experience is designed around real-world needs—topping up, sending, saving, or converting money through a simple, intuitive interface.

If you want to manage USDC and USDT without intermediaries, download the app on iOS or Android and get started today.