Will USDT crash?? Can it be exchanged for USDC??
Many people only look at the names and think that both USDT and USDC are stablecoins pegged to the US dollar, with similar nature and comparable risks.
However, upon deeper understanding, one realizes that they are fundamentally different: one was born out of spontaneous demand amid market chaos, while the other is a product of proactive design within a regulatory framework.
One comes from the underground, while the other comes from the system.
USDT (Tether) has never used compliance as its selling point; its core logic is 'as long as it works, that’s good enough.' Its mission is to provide on-chain dollars to people in any corner of the world who do not have a bank account.
- Low reserve transparency, many historical controversies
- Frequently named by regulators
- Yet consistently occupies the largest trading volume and circulation
This seems contradictory, but is actually reasonable. In areas where the financial system is incomplete or excluded—such as the gray trade in the Middle East, countries in South America with hyperinflation, and small cross-border traders in Southeast Asia—there is no need for flawless assets; only readily available dollars are required. USDT perfectly fills this gap.
The more chaotic a country’s finance is and the more closed off it is to formal dollar channels, the stronger the demand for USDT becomes. It does not provide a sense of security, but rather the capability to survive. USDT is a self-rescue product of the market's demand for dollars.
USDC (USD Coin issued by Circle) has aimed at a completely different audience since its inception: financial institutions, compliant enterprises, and regulated markets.
- Reserves are disclosed regularly, custody is transparent
- Deeply influenced by the US regulatory framework
- Its structure may change with policy adjustments
USDC is an extension of the US regulatory system on the blockchain. What it brings is not the highest liquidity, but 'legitimacy.' When banks, payment companies, and publicly listed companies need on-chain dollars for reconciliation, auditing, and compliance operations, USDC is the only asset they dare to choose.
However, compliance also means controllable: assets may be frozen, addresses may be blacklisted, and cross-border usage may be restricted. USDC is not a tool for de-dollarization, but rather a tool for the digital governance of the dollar.
USDT: Dominates in disorderly and excluded regions
USDC: Expands in orderly and institution-dense areas
The world simultaneously exists with both 'orderly' and 'disorderly' aspects, so neither will replace the other in the short term. This is the true meaning of stablecoins.
