As Tether is not a coin to buy for speculation in this review I will compare Tether (USDT) and its closest competitor, USD Coin (USDC), to determine which stablecoin is the better one to use and hold your money in crypto with. Both of these stablecoins are widely recognized and play a crucial role in the cryptocurrency industry, however there are several key factors to consider when deciding which one is superior.
Firstly, let's discuss their pegs. Both USDT and USDC aim to maintain a 1:1 value ratio with the US dollar, backed by assets equivalent to their market capitalization. However, Tether has faced numerous concerns regarding the stability of its reserve assets. The company has been accused of using unbacked reserves to support the value of its stablecoin and has been heavily fined for its failure to provide proof of these reserves. On the other hand, Circle, the organization behind USDC, has earned a strong reputation for maintaining transparency and has gained public trust within the industry. However it is worth noting that Tether has made efforts to enhance its transparency following its legal battle with the New York attorney general.
Throughout my experience in the crypto industry, I have witnessed USDT break its peg by a big amount on three occasions. The first instance was in 2018 when doubts arose regarding the validity of Tether's fiat reserves. The second occurred during the Covid market crash in March 2020, and the most recent incident was related to the collapse of Luna. USDC, on the other hand, has generally maintained a more stable, until very recently when it faced a brief period of de-pegging when Silver Valley Bank went under. This bank was where 8% of USDC's reserves ($3.3 billion) were held. Although the issue was not caused by USDC itself, it highlights the vulnerability of relying on centralized fiat banking systems. It seems that the $3.3 billion previously held in Silver Valley Bank has now been fully transferred to new banking partners, lets hope these banks have better luck than SVB did.
Both stablecoins have expanded their presence by being available on multiple blockchains and they offer transparency in terms of blockchain transactions. Additionally both coins facilitate quick and easy transfers, which is beneficial for peer-to-peer transactions and transitioning between cryptocurrencies and fiat currencies. I use Tether for P2P quite a lot and it is very convenient.
Considering their history, Tether has been in operation since 2014, while USDC was launched more recently in 2018. This longevity has allowed Tether to establish itself in the market and gain a significant trading and liquidity volume. Currently, Tether has many more trading pairs available on exchanges compared to USDC.
Overall personally, I believe Tether remains the superior choice. Despite facing significant challenges, Tether has demonstrated resilience and has weathered tougher storms than USDC. Its longer presence in the market, increased transparency, and higher liquidity on exchanges make it a more favorable option for investors and traders like myself. However it is essential to monitor any developments and regulatory concerns associated with Tether and USDC to make up to date informed decisions. Show Less
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