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USDC vs USDT: differences and which one to invest with

Both are worth a dollar and both move in seconds. But they are not the same: who issues them, how their backing is reported and what you can do with each one all differ.

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What USDC and USDT are

They are stablecoins: tokens designed to always be worth one dollar. For each token in circulation, the issuer states it holds a dollar (or equivalent very short-term assets) in reserve. They let you hold digital dollars, send them anywhere in seconds and buy other assets without going through a bank.

  • USDT is issued by Tether. It is the most used stablecoin in the world and the most common on Latin American exchanges.
  • USDC is issued by Circle, a US company. It is the most used in financial applications on blockchains.

The differences that matter

  • Issuer and regulation: different companies, in different jurisdictions, with different rules on which reserves they may hold. It is worth reading what each issuer publishes.
  • Reserve reports: both publish periodic reports on what backs their tokens; frequency and detail differ.
  • Where they are accepted: USDT dominates exchanges and person-to-person payments; USDC dominates lending and yield protocols. That is why interest is usually paid in USDC.

Which network to use

Both exist on many networks (Tron, Ethereum, Solana…). For INVERSHA the only valid network isSolana: USDT sent over TRC20 or ERC20 does not reach your portfolio. Choose Solana as the network on your exchange and, the first time, send a small test amount (how to send over Solana).

USDC or USDT in INVERSHA

When you open a portfolio you choose its currency, and the whole portfolio lives in it:

  • USDC portfolio: the engine buys tokenized stocks, gold and crypto with your USDC, and what it does not invest can earn interest in Lulo (how it works).
  • USDT portfolio: the engine trades your USDT directly, without converting it every time. What it does not invest stays free in the wallet: no interest, because Lulo only accepts USDC.

When a position is sold, the money returns in the portfolio's currency: deposit USDT, get USDT back.

Which one should you use?

  • If you want the money that is not invested to earn interest, use USDC.
  • If you already hold USDT and do not want to pay to convert it, open a USDT portfolio: you can stillbuy stocks with USDT, gold and crypto.
  • You can have both: each portfolio is independent.

Risks of both

A stablecoin can lose its dollar peg: USDC lost it for a few days in March 2023, when part of its reserves was stuck at a bank that failed. They depend on the issuer holding what it says it holds and on the network they move on. They are not bank deposits and are not insured by a government. INVERSHA is not an investment adviser.

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