Will USDT collapse? Should you switch to USDC?

A lot of people look at the names and think, “Aren’t USDT and USDC both stablecoins pegged to the US dollar? They should be pretty much the same, right?” In reality, these two are completely different. One is homegrown and wild, the other is born within the system.

USDT has never made compliance its selling point. Its logic is simple: “As long as it works, it’s fine.” To put it bluntly, the very purpose of USDT is to let people around the world who don’t have bank accounts or access to US dollars use dollars on-chain.

Reserves? Not transparent. Controversies? Plenty. Regulation? Called out all the time. But trading volume and circulation? Always number one.

It sounds contradictory, but if you think about it, it actually makes sense. Look at places where the financial system has collapsed—gray channels in the Middle East, countries in South America with runaway inflation, business people in Southeast Asia handling cross-border micropayments—they don’t care whether your assets are clean or not, only whether they can cash out at any time. USDT fills exactly this gap.

The more chaotic the financial system and the harder it is to get legitimate US dollars, the higher the demand for USDT. What it provides isn’t a sense of security, but the ability to survive. This is the market’s self-help response to the global thirst for US dollars.

USDC? Completely different story. Circle launched this coin targeting institutions, businesses, and compliant markets from the very start.

Reserves? Regularly disclosed. Custody? Fully transparent. Regulation? Deeply tied to US policy.

USDC is essentially a projection of the US regulatory system on the blockchain. It doesn’t offer the highest liquidity, but it does provide “legitimacy.” When banks, payment companies, and publicly listed firms need to process transactions, audits, and compliance workflows on-chain, USDC is the only option they dare to use.

But compliance also means being controlled: assets can be frozen, addresses can be blacklisted, and cross-border use may be restricted. USDC isn’t a tool for de-dollarization—it’s a digital extension of dollar governance.

So you see, USDT dominates in regions that are disordered or excluded; USDC expands in well-ordered, institution-heavy markets.

The world has always had both “order” and “disorder,” so neither can replace the other in the short term. That’s the true meaning of stablecoins.