USDT vs. USDC: Which Will Win the Stablecoin Race?

Stablecoins, which are blockchain tokens that track traditional currencies, soared last year as they began to gain traction in mainstream finance. No longer the sole purview of cryptocurrency traders, stablecoins have the potential to transform the global remittance market and broader payment infrastructure.

USDT (USDT 0.02%) and USD Coin (USDC +0.00%) are both major stablecoins pegged to the U.S. dollar. Their differences, including liquidity, trading volumes, and compliance, could dictate which one prevails in the long term.

Image source: Getty Images.

USDC just overtook USDC in transaction volume

According to research by The Motley Fool, Tether’s USDT dominates the stablecoin market. It has a significantly larger market cap than USDC, issued by Circle Internet Group (CRCL 5.62%). Although USDT’s liquidity and popularity are major advantages, USDC recently gained in another key metric: transaction volumes.

Since the start of January, USDC transactions totaled $2.55 trillion, and USDT transactions came to $1.49 trillion. One quarter’s activity only says so much, but overtaking USDT is still a significant shift. In the long term, transaction volume may be more important than market cap, as it shows the token is being used.

Data sources: CoinGecko, Circle, Tether, and Visa as of March 25, 2026.

USDC is more compliance-friendly

Another big difference between the two is transparency. Fiat-backed stablecoins must maintain readily accessible funds in reserve for each token in circulation. Circle is a publicly traded U.S. company, and accounting firm Deloitte issues a monthly attestation that each USDC is fully backed by reserves. Most of its reserves are held in cash and short-term U.S. Treasuries in a fund managed by BlackRock.

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NYSE: CRCL

Circle Internet Group

Today’s Change

(-5.62%) $-5.84

Current Price

$98.02

Key Data Points

Market Cap

$24B

Day’s Range

$97.35 - $103.55

52wk Range

$31.00 - $298.99

Volume

738K

Avg Vol

16M

Gross Margin

5.88%

Tether, based in El Salvador, was fined $41 million in 2021 by the Commodity Futures Trading Commission for false claims about its U.S. dollar backing for USDT. Although it publishes a quarterly report from BDO Italia, it hasn’t been able to shake questions about its reserves. About three-quarters are in cash and short-term U.S. Treasuries, but it also holds Bitcoin, precious metals, and short-term loans.

Tether is taking steps to change its reputation. On March 24, Tether said it had engaged a major accounting firm to do a full audit, although it did not identify the firm. This may help it meet U.S. and E.U. stablecoin requirements.

What the USDC-USDT rivalry means for investors

The stablecoin market could grow from about $315 billion today to as much as $4 trillion in the next five years. That landscape is evolving, and we have yet to see the impact of further regulation or stablecoins issued by traditional financial institutions.

Even so, it’s worth watching the USDC-USDT rivalry. Chiefly, anyone holding or using stablecoins would be wise to stick to USDC because its reserves are fully audited and so it carries less risk.

Secondly, investing in Circle stock is a prime way to get exposure to the growing stablecoin market. Tether is a private company, making it difficult for retail investors to benefit from its growth. Investors could also buy cryptocurrencies, such as Ethereum or Solana, that support stablecoins.

Finally, stablecoins make up 12% of the total cryptocurrency market cap. If those lingering questions about Tether’s reserves are justified, it could deal a blow to the whole industry.