Stablecoins are digital currencies designed to maintain a steady value, typically pegged 1:1 to the U.S. dollar. They offer the benefits of blockchain, such as speed, transparency, and programmability, combined with the price stability of fiat money. The two largest stablecoins by market cap, Tether (USDT) and USD Coin (USDC), play a central role in crypto trading, lending, and DeFi applications.
In 2025, stablecoins play a more critical role in crypto than ever before. As of June, the total stablecoin market cap has surpassed $250 billion, nearly doubling from $130 billion in January 2024. This explosive growth reflects more than just investor confidence, it signals rising institutional demand for tokenized dollars across DeFi, global payments, and settlements.
Stablecoins' market dominance breakdown | Source: DefiLlama
Additionally, the U.S. Senate advanced the GENIUS Act on June 11, 2025, a pro-stablecoin bill backed by John Thune and aligned with Trump’s crypto stance, aiming to boost U.S. leadership in digital assets. Critics, including Senator Elizabeth Warren, warn it lacks consumer protections, while a related STABLE Act is under review in the House.
The explosive growth in stablecoins' market cap signals more than investor confidence. It reflects the crypto bull run, increased mainstream adoption of digital assets, and rising institutional demand for tokenized dollars in payments, DeFi, and global settlements.
Two stablecoins dominate this growing ecosystem:
• Tether (USDT) is the world’s most traded and most widely accepted stablecoin. It dominates centralized exchanges, P2P platforms, and emerging market use cases. With a market cap of over $155 billion, a market dominance of over 62%, and ranking third among crypto assets in market cap after Bitcoin and Ethereum, USDT is the undisputed leader in the stablecoin sector.
• USD Coin (USDC) is known for its transparency, regulated structure, and popularity across DeFi protocols, enterprise payments, and U.S.-based institutions. With a market cap of over $60 billion, USDC ranks second among stablecoins and is the seventh-largest crypto asset in the market.
So which one should you use in 2025?
Your choice depends on priorities: USDT offers greater liquidity, while USDC emphasizes compliance and transparency. In this guide, we break down everything you need to know about USDC vs. USDT, from how they work to where they’re heading next.
What Are Stablecoins and How Do They Work?
Stablecoins are cryptocurrencies with a fixed price; for instance, US-pegged stablecoins maintain their value around $1. They are backed by assets like cash or government bonds to help them stay pegged to fiat currencies like the US dollar.
Stablecoins are like digital dollars you can use on crypto platforms. Unlike Bitcoin or Ethereum, their value stays stable, making them useful for everyday payments, saving, or sending money abroad.
Popular stablecoins like USDT and USDC are backed by real dollars or similar assets. This means each token is meant to equal $1, helping you trade, earn rewards in DeFi, or avoid price swings during market dips.
In 2025, stablecoins have become essential tools for crypto users. But not all stablecoins are built the same. Let’s look closer at how USDC and USDT compare.
Introduction to the Largest Stablecoins: USDT and USDC
Tether (USDT) and USD Coin (USDC) dominate the field of stablecoins. These two tokens represent over 90% of the global stablecoin market by volume. But while they both aim to offer price stability and dollar-pegged reliability, their designs, reputations, and recent developments show just how different they are.
Below is a closer look at each, including what they do, who’s behind them, and where they’re headed in 2025.
What Is Tether (USDT)?
USDT breakdown across blockchain ecosystems | Source: DefiLlama
Tether (USDT) is the oldest and most widely used stablecoin in the world. Launched in 2014 by Tether Limited, a Hong Kong-based company owned by iFinex Inc. (which also operates Bitfinex), USDT is a fiat-backed stablecoin pegged 1:1 to the U.S. dollar. This means one USDT is intended to always equal $1. As of mid-2025, USDT boasts a market capitalization of over $155 billion and daily trading volume exceeding $80 billion, accounting for more than 75% of all stablecoin trading globally. Its popularity comes from its fast settlement, support across dozens of blockchains, and strong presence in both centralized and decentralized crypto markets.
Despite ongoing criticism, Tether is evolving beyond its role as a stablecoin issuer into a major player in digital finance, particularly within the Bitcoin ecosystem. In 2025, the company announced the development of its own open-source Bitcoin mining operating system (MOS), expected by Q4, aiming to decentralize mining and reduce reliance on third-party tools.
Tether also holds over 75,000 BTC (worth around $5.2 billion) and large reserves of physical gold, positioning it among the largest corporate holders of both assets, a strategy meant to strengthen USDT’s backing and reduce exposure to traditional financial risks. While competitors like Circle pursue IPOs, Tether’s CEO Paolo Ardoino has dismissed such plans, suggesting the company could eventually reach a $1 trillion valuation. Further expanding its reach, Tether recently acquired a majority stake in Twenty One Capital, founded by Strike’s Jack Mallers, making it the third-largest corporate holder of Bitcoin.
Strengths of USDT
1. Deep Liquidity Across Markets: USDT is the most traded stablecoin on major exchanges and DEXs. Whether you're using BingX, Uniswap, or dYdX, USDT is likely the default quote currency. Its massive volume ensures tight spreads and fast execution for traders.
2. Multichain Compatibility: Tether supports more than 10 blockchain networks, including Ethereum (ERC-20), Tron (TRC-20), Solana (SPL), Polygon, TON, Avalanche, and Algorand. This flexibility makes it easy to move USDT between ecosystems and avoid high gas fees.
3. Popular in Emerging Markets: In countries facing inflation, capital controls, or banking restrictions, USDT has become a go-to tool for preserving dollar value. It's widely used in peer-to-peer (P2P) trading, cross-border remittances, and off-exchange settlements in regions like Latin America, Africa, and Southeast Asia.
4. Growing Financial Role: Tether is expanding beyond stablecoins. It now holds a large Bitcoin and gold treasury, participates in Bitcoin mining, and has launched new initiatives to support financial inclusion in developing markets.
Weaknesses and Concerns
1. Limited Transparency on Reserves: While Tether publishes monthly breakdowns of its reserve composition, it still does not undergo full independent audits. This lack of external verification has raised questions about the safety and liquidity of its backing assets, especially during times of market stress.
2. History of Regulatory Fines: In 2021, the CFTC fined Tether $41 million for falsely claiming that each USDT was fully backed by U.S. dollars held in bank accounts. Investigations revealed that Tether had, at times, operated with fractional or mixed asset reserves.
3. Centralized Control: Tether is operated by a private company, and its reserve management is not open-source or verifiable on-chain. It can freeze assets at its discretion, something that has raised decentralization concerns among DeFi users and privacy advocates.
4. Peg Risk in Extreme Scenarios: Although USDT has never experienced a major depeg event, concerns persist about how it would handle large redemptions during a systemic shock or liquidity crunch, especially without regular stress testing disclosures.
Tether remains the most widely used stablecoin for a reason: it’s fast, accessible, and liquid. But its transparency model and centralized structure mean users must weigh convenience against potential risks, especially in volatile or high-stakes situations.
What Is USD Coin (USDC)?
USDC market cap as of June 2025 | Source: DefiLlama
USD Coin (USDC) is a fully backed, fiat-pegged stablecoin issued by Circle, a U.S.-based fintech company. Launched in 2018 in collaboration with Coinbase through the Centre Consortium, USDC was created to offer a transparent and regulated digital dollar for global use. As of mid-2025, there are over $60 billion USDC tokens in circulation, with an average daily trading volume of $11 billion. While second to Tether (USDT) in market cap, USDC is widely regarded as the most regulation-friendly and institution-ready stablecoin. It is actively used on both centralized exchanges like BingX and across DeFi platforms for payments, lending, staking, and governance, particularly by institutional players and U.S.-based users.
In 2025, Circle solidified its status as a major force in digital finance. On June 5, the company went public on the New York Stock Exchange under the ticker CRCL, raising $1.1 billion and reaching a $16.7 billion valuation. The stock surged 168% on its first day, highlighting investor confidence in regulated crypto firms. Circle also reported strong Q1 financials, with $578.6 million in revenue and $122.4 million in adjusted EBITDA.
The company expanded its global regulatory footprint, holding licenses in the U.S., EU, and Singapore, which bolstered USDC’s credibility in compliant markets. New product launches included the Circle Payments Network (CPN) for blockchain-based treasury and cross-border transactions, and the Cross-Chain Transfer Protocol (CCTP), enabling seamless USDC movement across Ethereum, Solana, and Avalanche. Circle also introduced EURC, a fully backed euro stablecoin aimed at the EU market. These moves signal that stablecoins like USDC are evolving into key infrastructure for the global digital economy.
Strengths of USDC
1. Transparent and Verifiable Reserves: USDC is fully backed 1:1 by cash and U.S. Treasury assets. Each month, Circle releases attestation reports verified by top auditing firms like Deloitte. The funds are held in segregated accounts with trusted financial institutions such as BNY Mellon and BlackRock, providing clear visibility into what backs every token.
2. Regulated and Policy-Aligned: USDC is designed to comply with financial regulations. Circle holds licenses in the United States, European Union, and Singapore, and works closely with regulators on stablecoin policy frameworks. It was also the first stablecoin issuer to secure a BitLicense in New York.
3. Designed for DeFi and On-Chain Use: USDC is a top asset across major DeFi protocols, including Aave, Compound, Uniswap, and Curve. It’s often used as collateral for loans, liquidity pools, and yield farming strategies. Developers also use USDC in DAO treasuries and smart contracts because of its predictable value and compliance-first design.
4. Strong Banking and Infrastructure Partners: Circle's reserve partners include top-tier banks and asset managers, reducing risk compared to smaller or opaque custodians. USDC is also supported by Circle Mint, Cross-Chain Transfer Protocol (CCTP), and the Circle Payments Network (CPN), which enable cross-chain swaps, treasury management, and fiat on/off ramps for businesses.
Weaknesses and Limitations of USD Coin
1. Lower Liquidity Compared to USDT: While USDC is widely available, it still lags behind USDT in total trading volume and global reach. Some exchanges and emerging market P2P platforms still favor USDT due to higher demand and deeper liquidity.
2. Banking and Counterparty Risks: USDC’s backing depends heavily on the traditional banking system. In March 2023, Circle revealed it had $3.3 billion in reserves stuck at Silicon Valley Bank (SVB) during its collapse. This caused USDC to briefly lose its peg, trading as low as $0.88 before recovering. highlighting risks tied to centralized banking partners.
3. Geographic Concentration: USDC adoption is strongest in North America, Europe, and regulated financial hubs. It sees less usage in informal markets, where unbanked users and traders often prefer USDT or cash alternatives. This limits its role in global remittances and informal commerce.
4. Interest Rate Sensitivity: Much of Circle’s revenue comes from interest on USDC reserves. If interest rates drop, profitability could decline. This may impact USDC’s incentives, growth strategy, or support services over time.
USDC is often called the “regulated stablecoin” because of its transparency, strong financial partners, and focus on compliance. While it may not be as widely used as Tether in all markets, it’s a leading choice for users who value security, clarity, and policy alignment, especially in enterprise or institutional contexts.
USDT vs USDC: Key Differences
| Category | USDT (Tether) | USDC (USD Coin) |
| Launch Year | 2014 | 2018 |
| Issuer | Tether Limited | Circle & Coinbase (Centre Consortium) |
| Market Cap (2025) | ~$155 Billion | ~$60 Billion |
| Daily Volume (2025) | ~$83+ Billion | ~$12 Billion |
| Transparency | Limited disclosures | Monthly audited reports |
| Regulatory Compliance | Moderate, past issues | High, aligned with US and EU regulations |
| Reserve Backing | Mix of T-bills, loans, other assets | Cash + short-term U.S. Treasuries |
| Reserve Audits | Not regular | Audited by top firms like Deloitte |
| De-pegging Incidents | Brief, rare | Brief (SVB crisis), quick recovery |
| Best Use Cases | High-frequency trading, global usage | DeFi, regulated institutions, long-term hold |
USDT is the most traded stablecoin, with over $80 billion in daily volume on major platforms and blockchains like Ethereum and Tron. That means you can enter or exit positions quickly. It works well for spot trading, cross-border transfers, and P2P deals, especially in Asia and Europe.
When it comes to choosing between USDC and USDT, your decision should depend on how you plan to use stablecoins. For spot trading, USDT remains the top choice due to its deep liquidity and support across almost every major exchange. If you’re looking for long-term holding, USDC may be the safer bet thanks to its monthly audits and backing by trusted financial institutions.
Choose USDT if you need deep liquidity and global reach.
USDC backs its supply with cash and U.S. Treasuries, audited monthly by third-parties. It’s licensed under EU’s MiCA, and trusted by U.S. and EU institutions . This makes USDC ideal for regulated businesses, DeFi protocols, and yield strategies.
In DeFi and staking, USDC is widely preferred because of its regulatory transparency and compatibility with protocols that demand strict compliance. Institutional users, including banks and corporations, also favor USDC for cross-border transfers due to its legal clarity and security. On the other hand, USDT shines in remittance scenarios, especially in underbanked regions, offering faster and cheaper transfers on networks like Tron.
Choose USDC if you prioritize transparency, compliance, and DeFi use.
How to Buy USDT and USDC on BingX
Getting started with USDC or USDT on BingX is simple. Just follow these steps:
1. Create an Account: Head to the BingX website and sign up using your email or mobile number. Once your account is created, complete the basic KYC verification process. This is required to unlock deposit, trading, and withdrawal features.
2. Deposit Funds: Next, go to the “Deposit” section and choose your preferred stablecoin.
• For USDT, select a blockchain like TRC-20 (Tron network) to save on fees. It usually costs around $1 per transaction.
• For USDC, options like ERC-20 (Ethereum) or Polygon are available, depending on your wallet setup.
3. Buy Using Spot or P2P
• Spot Trading: Go to the BingX spot market and search for USDC/USDT or another desired trading pair. Choose “Buy,” set your amount, and confirm the order.
• P2P Trading: Want to buy from another user? Use BingX’s peer-to-peer (P2P) platform to buy USDT directly with local currency. You can chat with the seller, negotiate prices, and pay using bank transfer, UPI, or other local options.
This flexibility makes BingX one of the easiest ways to access stablecoins, no matter where you are.
Converting Between USDT and USDC on BingX
If you already hold one stablecoin and want to switch, BingX offers two easy methods:
1. Use BingX Convert: Go to the “Convert” tab on the platform. Choose USDC → USDT (or the reverse), enter the amount you want to convert, and click “Confirm.”
• There’s no slippage, and the fee is usually under 0.2%.
• It’s ideal for fast, one-click conversions without using the spot market.
2. Trade USDC/USDT on the Spot Market: Prefer more control over pricing? Open the USDC/USDT pair in the spot market. Place a limit or market order depending on your strategy. This is great if you want to wait for a specific exchange rate or avoid market impact on large orders.
How to Withdraw USDT or USDC to Your Bank Account
Stablecoins like USDC and USDT aren’t directly supported by most banks, so you’ll need to convert them to fiat currency first:
1. Sell USDT or USDC for USD or your local currency using BingX’s spot or P2P market.
2. Withdraw the converted funds via bank transfer.
• BingX supports withdrawals in multiple fiat currencies, but fees and limits vary by region.
• Some countries support instant payouts, while others may take 1–3 business days.
Note: Always check your local regulations and ensure the receiving bank supports crypto-related transactions.
Key Considerations When Choosing USDC or USDT
Both USDT and USDC aim to maintain a 1:1 peg to the U.S. dollar but carry risks. In March 2023, USDC briefly dropped to $0.88 due to exposure to the collapsed Silicon Valley Bank, highlighting its reliance on traditional banks. USDT has been more stable but experienced minor de-pegs during past market stress.
USDC offers greater transparency through monthly attestations by firms like Deloitte, while Tether provides internal reserve reports without full audits. Regulatory risks also differ. Circle is licensed in multiple jurisdictions, making USDC more attractive to institutions, while USDT has faced fines and growing scrutiny. Both are centralized and depend on the solvency and practices of their issuers.
Additionally, new yield-bearing stablecoins like Ethena’s USDe and Ondo’s USDY offer higher returns but come with added risks such as interest rate exposure and smart contract vulnerabilities. As the market evolves, understanding these differences is essential for stablecoin users.
Conclusion
USDT and USDC are two of the most widely used stablecoins, offering a way to hold digital dollars without the volatility of assets like Bitcoin or Ethereum. While they share similar functions, each caters to different priorities. USDT excels in liquidity and market reach, while USDC emphasizes transparency and regulatory compliance.
When choosing a stablecoin, it's important to consider your specific use case. Factors such as trading frequency, use of DeFi platforms, international transfers, or simply holding a stable asset can influence the decision. The most suitable stablecoin will depend on your use case, trading goals, and preferred platforms.
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FAQs on Stablecoins
1. Is USDT fully backed?
Tether claims that USDT is fully backed by reserves, including U.S. Treasuries, cash equivalents, and other assets. However, it does not undergo regular third-party audits, and the company has faced regulatory scrutiny in the past for transparency issues.
2. Can USDC and USDT de-peg?
Yes. Both stablecoins have briefly lost their 1:1 peg in the past. USDC de-pegged during the Silicon Valley Bank crisis in 2023, and USDT has seen occasional dips due to concerns over reserves. In both cases, they quickly returned to $1.
3. USDT vs. USDC: Which is safer?
USDC is generally considered safer due to its transparency and regulatory oversight. It undergoes regular audits and holds reserves with regulated financial institutions. USDT offers more liquidity but has faced criticism for its lack of transparency.
4. Can I convert USDT to USDC?
Yes. You can convert USDT to USDC and vice versa directly on BingX using the Convert tool or trade the USDC/USDT pair in the spot market. The process is quick and typically has very low fees.
5. How are stablecoins like USDT and USDC taxed?
Stablecoins are taxed like any other crypto. If you sell or convert them, you may trigger a capital gains tax, even if the gain is small. Make sure to keep track of every transaction and report it during tax season. Consider using a crypto tax platform or consulting a professional for guidance.