USDT was historically the first option on the market. Therefore, it is more popular and widely used. However, these two options are basically the same and differ only slightly to say that some of them are better than others.
USDT vs. USDC vs. BUSD: What’s the Difference?
19 Apr, 2023
Crypto world is usually associated with high profits as well as swiftness and security of transactions. However, after the first such currencies appeared, we constantly observe their volatility. Thus, their value changes over time and such a change can be dramatic. To overcome this issue while preserving all the crypto benefits, stablecoins were introduced. The main idea was to back such a cryptocurrency with some real and stable assets and make it stable. That is the reason for the general name of this group, which main representatives nowadays are Tether (USDT), USD Coin (USDC) and Binance USD (BUSD). Would you like to compare USDT vs. USDC or understand what's the difference between USDT and BUSD? Then, this article is just for you.
BUSD vs USDT vs USDC
All these coins are pegged to some other assets. It can be gold or most often fiat money. Those options that we are going to discuss further on are linked to the US dollar at a 1:1 ratio. Still, they provide a perfect chance to act swiftly, inexpensively and securely without any obstacles of traditional banking systems. Thus, their developers decrease volatility and increase stability that sounds like the dream of a crypto trader or investor. The main benefits of this attractive reality are as follows:
- If we compare BUSD vs USDC vs USDT, we will see that they all are backed by the same fiat. This contributes to their stability and reliability;
- One can easily find an exchange like Exolix to convert, swap or make other transactions with them no matter what is the time or day of the week;
- These coins are utilized internationally so any payment is going to be easy and quick;
- Immediate transactions. With these coins, swiftness is always guaranteed;
- Low and sometimes zero-fee transactions. That is a quite beneficial point for those who make many actions at a time;
- Transparency of the systems and their developers. These companies undergo regular audits and everyone can follow their state of affairs
Now let’s see some useful details on the most common options.
This coin is backed by the U.S. dollar at a 1:1 rate. Thus, it is almost the same real dollar but a digital one. One can easily operate with it in the same way as with traditional currency. It was launched in 2014 for the following reasons:
- Make transfers easier;
- Offer more stability than BTC;
- Provide higher transparency for users.
Since that time, it became one of the biggest cryptocurrencies in the world and has the largest market cap among similar options. That is the difference USDT USDC. But, there were some issues related to its reserves. In 2021, the company received a $41 million fine because each coin was not backed by a dollar as was claimed. Still, since that time, the situation was improved and there is no evidence of any problems nowadays.
What’s the difference between USDT and USDC? This stablecoin is also pegged to the U.S. dollar. It was launched in 2018 by Centre Consortium, LLC with basically the same ideas that were already described above. It was created as an Ethereum token. The coin was favorable for transfers and allows users to profit from higher yields when utilizing DeFi applications. This option has gradually become popular and added other networks such as Hedera and Stellar that are not used by USDT. Still, the latter is the leader by the amount of networks used. Thus, we can claim that the answer to the question is USDT and USDC the same, is no. Until March 2023, this coin proved its stability and gathered a vast audience of fans. However, it experienced an abrupt and unpleasant downfall due to the closure of several related banks. This situation led to a real panic in the market and more questions about the stability and safety of the project. Luckily enough, the situation improved very quickly and USDC restored its position.
More speed, accessibility and flexibility were announced by Binance and Paxos in 2019 when they launched BUSD. There was not much BUSD vs USDT difference as this new coin was also backed by the same fiat. The developers claimed that for every BUSD there’s a dollar reserve. Therefore, the volatility is related to this fiat. BUSD utilizes BNB Chain and Ethereum. The project promised transparency and reliability and everything went well until February 2023. It appeared that this security is unregistered and Paxos ceased its issuance and ended cooperation with Binance. No wonder the price has dramatically dropped and since that time millions of users pulled out of it. For now, the situation freezes at this point and we can hardly predict the future of this project if there is any. Altogether, we can claim that all the coins are similar according to their main idea and its realization. However, they utilize different blockchains and have rather different stability levels despite their names. It’s still worth keeping an eye on the situation on the market and do not rely on their issuers too much. The current events have proven it.
Frequently Asked Questions
For now, the situation with BUSD and its future remains unclear. As for USDT, it keeps its position and remains stable as it is named.
If previously their security level was almost the same, recent events have significantly dropped BUSD. Therefore, USDT remains a safer option.