The value of currencies changes constantly, and one of the factors that leads to volatility is the financial policy of each country. For example, the decisions of the Central Bank of Thailand on interest rates will affect the strength of the Thai baht. International businesses are often hit the most when currencies fluctuate. As factories buy materials from abroad for production and domestic consumption or export, foreign exchange rates will directly affect their profits.
Because of this volatility, many investors choose to invest in foreign currencies with the desire to eat the difference when the exchange rate changes. But the difficulty is still there. So many people choose to invest in stablecoins like USFT or USDC, a cryptocurrency that is less volatile and tradable 24 hours. Let's learn about USDC and USDT What is and what is the difference between them.
What is USDT?
Tether nice USDT is a cryptocurrency on blockchain Okay anchor price in USD. It is managed by the company Tether based in Hong Kong. One USDT circulating means 1 USD is stored, so investors hold Tether can always be converted to USD.
What benefits does USDT bring?
USDT will be created when there is demand. Tether will generate multiple tokens and put USD into storage as crypto exchanges need USDT to form the pair. USDT makes it easier for investors to trade between USD and other cryptocurrencies as most people are familiar with USD. Detail ETH/USD will make it easier for them to analyze the market and understand price trends than ETH/BTC.
Adding USDT to your portfolio also helps preserve your capital in times of market volatility. You just need to convert your holdings into USDT when the market fluctuates without withdrawing USD.
What does the amount of USDT in circulation represent?
When large institutions want to invest in digital assets, the first step they take will be to convert USD to USDT before buying other cryptocurrencies. So, if you see a higher amount of USDT in circulation, this means that there is going to be a significant buying demand for other cryptocurrencies, for example. Bitcoin.
What is USDC?
USDC is a stablecoin launched in 2018 by Center, a company that cooperates between exchanges Coinbase and Circle Internet Finance. USDC is a token ERC-20 is built on the foundation Ethereum pegged to USD. Similar to USDT, one USDC in circulation is equivalent to 1 USD stored.
USDC is one of the most popular tokens. The capitalization as of July 11, 2021 is $26 billion, the 2nd largest in the stablecoin market after USDT.
What are stablecoins?
A stablecoin is a cryptocurrency with stable value pegged to the fiat currency it represents in a 1:1 ratio. For example, 1 USDT = 1 USD and 1 USDC = 1 USD.
Benefits of stablecoins
Fix the high volatility characteristics of cryptocurrencies.
Transparency on blockchain.
Cross-border money transfers are quick and easy without any intermediaries and without worrying about time zone differences.
Difference between USDT and USDC
The difference between these two stablecoins is like the same shoes but manufactured by two different companies. USDT and USDC are both stablecoins of USD but belong to 2 different companies, so there are some differences.
|Developers||Tether Limited||Center (cooperation between Coinbase and Circle)|
|Type of stablecoin||Fiat||Fiat|
|Value||1 USDT = 1 USD||1 USDC = 1 USD|
|Blockchain||Bitcoin, Ethereum, EOS, TRON, Algorand, SLP, OMG||Ethereum, Algorand, Solana|
|Audit||Freef Sporkin & Sullivan (Law firm)||Grant Thornson|
USDT launched in 2014 by Tether Limited. USDC launched in 2018 by Coinbase and Circle.
USDT is audited by Freef Sporkin & Sullivan LLP. However, no one knows how often these accounts are audited leading to concern for some investors.
USDC is audited by Grant Thornson, one of the top 5 auditing and consulting firms in the world. USDC hosting accounts are audited monthly and announced on Circle's website.
Different blockchains give users different choices and advantages, from speed to utility.
USDC is supported on the Ethereum blockchain, Algorand, Solana.
USDT Supply vs USDC
As of July 11-September 2021, the current supply is 62.2 billion USDT and 26.09 billion USDC in the market.
Both USDT and USDC are stablecoins pegged to USD at a ratio of 1:1, so it is less volatile than other cryptocurrencies. Both are quite similar but issued by 2 different companies leading to some differences such as USD audit process. If you understand and are ready to enter the stablecoin world, trade USDT for 0% at the exchange. T-REX.