What is USDC?
USDC is a stablecoin that was created in 2018 by Circle in conjunction with Coinbase. USDC is safe and regulated in the United States, and is fully backed 1:1 by cash and short-dated US government bonds. It is the safest and most reliable stablecoin that has not lost its peg or deviated from $1 since its inception.
USDC is the best stablecoin for users of DeFi because it provides the best yields and compatibility with major applications like AAVE, Compound, Solend, Trader Joe, Yearn Finance, and many others.

What is USDT?
USDT is another stablecoin that was first developed and issued by Tether Limited out of Hong Kong. Tether is the most entrenched stablecoin on futures trading platforms like Binance and FTX and generally is the better option for uses looking to use centralized exchanges.
One issue regarding USDT is that it has only been partially audited and were late to provide transparent data around its reserves. While Tether (USDT) has been a safe and secure stablecoin, caution is advised.

USDC vs USDT: Adoption
When deciding which stablecoin is best, you must consider which has the widest adoption on DeFi and CeFi applications. Both USDC and Tether (USDT) have the highest market capitalization out of any stablecoin in the digital asset market. This means that they are nearly equally compatible with major lending applications in DeFi and CeFi.
Both USDC and USDT are equally available on all blockchain networks such as Ethereum, Solana, Avalanche, Tron, Binance Smart Chain, and many others. That means that both tokens can be used to deposit on major platforms like AAVE or Compound to earn interest.
That said, USDC is available on slightly more Decentralized Finance applications than USDT, so it is the superior stablecoin in that sense.

Security and Regulation
USDC and USDT start to distinguish themselves when you look at their regulatory history and the transparency concerning their cash reserves. USDC has been the gold-standard in transparency because they receive regular audits in the United States from top-tier firms.
On the other hand, Tether (USDT) have had a troubled history with regulators due to their reluctance to provide transparent reports up until very recently. With this in mind, we firmly believe that USDC by Circle is the safer stablecoin compared to USDT.
USDC vs USDT Farming Yields
USDT generally provides higher yield farming rewards on popular DeFi applications like AAVE, Stargate Finance or Compound Finance because it carries increased risk. The consensus amongst investors and farmers is that USDT is more likely to have regulatory issues than USDC, which means there is less USDT value locked in DeFi protocols.
With less value being locked in USDT on applications, it means that users can get a higher yield by providing liquidity and taking on the extra risk. While this may seem like a good idea at first glance, it is important to consider whether the additional risk is worth an extra 1% or 2% in farming rewards. For more information on this, read our best stablecoin interest rates guide.
Is USDC safer than USDT?
One key difference between USDC and USDT is that USDC is a fully collateralized stablecoin, which means that it is backed by a corresponding amount of US dollars held in reserve. This means that for every USDC in circulation, there is a corresponding US dollar held in a bank account that can be used to redeem the USDC if necessary. This gives USDC a level of transparency and accountability that is not present with some other stablecoins.
On the other hand, USDT is a partially collateralized stablecoin, which means that it is not fully backed by US dollars in reserve. Instead, USDT is backed by a combination of cash and other assets, which can include loans to affiliated companies and other investments. This has raised concerns among some users about the stability of USDT and its ability to maintain its peg to the US dollar.
In general, USDC may be considered to be a safer choice than USDT due to its fully collateralized nature and the transparency of its reserve backing. However, it is important to keep in mind that the safety of any cryptocurrency, including stablecoins, depends on a variety of factors and can change over time. It is always a good idea to do your own research and carefully consider the risks before investing in any cryptocurrency.
Final Thoughts
USDT and USDC are two of the most popular stablecoins on the market, but they have key differences that must be taken into consideration when making a decision between them. USDC is seen as more transparent and secure due to its fully collateralized nature and regular audits while USDT has had a troubled history with regulators and is only partially collateralized.
USDC also generally trades at a slight premium to USDT due to its increased popularity. Ultimately, it is important to do your own research and decide for yourself which stablecoin suits your needs best.