Tether vs USDC: Stablecoins Face Off in Market Cap and Trust
Tether (USDT) and USDC (USDC), both stablecoins pegged to the U.S. dollar, face contrasting outlooks. While Tether, with a market cap of about $172 billion, offers higher-yielding investment options, its past de-pegs and regulatory issues raise concerns. USDC, at $74 billion, is favoured by long-term U.S.-based investors for its transparency and trusted ownership.
Tether, launched in 2014, has a larger market cap and more liquidity, benefiting high-frequency crypto traders. However, it has lost its dollar peg multiple times, most notably in 2018 when its value fell below $0.90. Tether's owner, a Hong Kong-based company with ties to mainland China and Taiwan, has faced criticism for its opaque reporting standards and reserves. The assets are managed by Cantor Fitzgerald, controlled by the Lutnick family, but the legitimacy of Tether's founder and its motives remain questioned, with critics citing its current domicile in the British Virgin Islands as a regulatory loophole.
USDC, issued by Circle Internet Group (CRCL), a publicly traded company on the New York Stock Exchange, is praised for its transparency and adherence to high regulatory standards. It reports its reserves monthly, providing reassurance to long-term, buy-and-hold U.S.-based investors.
While Tether's higher-yielding investment options may attract some investors, its past de-pegs and regulatory issues cast a shadow over its future. USDC, with its transparent ownership structure and high regulatory standards, appears the safer bet for long-term, U.S.-based investors.
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