USDC vs. USDT Explained: Who Issues Them, What Backs Them, and What the GENIUS Act Changes

USDC and USDT are both stablecoins designed to stay worth one US dollar, and both are redeemable through their issuers. The main differences are who stands behind them and how they're overseen. USDC comes from Circle, a US company that keeps most reserves in a BlackRock-managed money market fund and publishes monthly attestations from a Big Four accounting firm. USDT comes from Tether, a company based outside the US, and it's the bigger of the two by market value. New US law, the GENIUS Act, is now pushing both toward the same set of federal rules on a multi-year timeline.

This guide reflects each issuer's public pages and the enacted text of the GENIUS Act as checked on October 29, 2026. It's educational, not a recommendation to hold either coin.

What a stablecoin actually is

A fiat-backed stablecoin is a token on a blockchain that an issuing company promises to redeem for a dollar. To keep that promise, the issuer holds reserves, such as cash, short-term Treasury bills, and repurchase agreements, that should equal or exceed the tokens in circulation.

Traders use stablecoins to park value between trades without cashing out to a bank. Others use them to move dollars across borders or between platforms quickly. The coin is only as good as the reserves and the issuer's ability to pay out when many people redeem at once.

USDC: Circle's approach

Who issues it

Circle issues USDC. Circle's transparency page lists Circle Internet Financial, LLC as licensed by the New York State Department of Financial Services as a money transmitter and for virtual currency business activity, and a Bermuda affiliate licensed by the Bermuda Monetary Authority. Deloitte has been Circle's independent auditor since its 2022 fiscal year.

What backs it

Circle says most USDC reserves are held in the Circle Reserve Fund, an SEC-registered government money market fund managed by BlackRock. That fund can hold cash, short-dated US Treasuries and overnight repurchase agreements, and BlackRock publishes daily third-party reporting on its holdings. The rest is held as cash, mostly at a small number of large banks.

How it reports

Circle discloses reserve holdings weekly and publishes a monthly attestation from a Big Four accounting firm confirming that reserves exceed the USDC in circulation. On October 29, 2026, the most recent monthly attestation listed on Circle's site was for September 2026.

USDT: Tether's approach

Who issues it

Tether issues USDT, which it writes as USD₮. The company operates outside the United States. Tether's site showed USDT's market capitalization at about $180.5 billion on October 29, 2026, which makes it the largest stablecoin.

What backs it

Tether says every token is pegged 1-to-1 with the matching currency and backed 100% by Tether's reserves, and that the issuer's assets exceed its liabilities. Tether publishes reserve reports and circulation figures through the Reports and Reserves section of its transparency page. Read the latest report directly for the current breakdown of what those reserves hold, since the transparency page itself doesn't list the composition.

How it reports

Tether says circulation data is typically published daily. When you open a reserve report, check its date, who prepared it, and whether it's an attestation (a point-in-time check of reserves) or a full audit of the company's finances. Comparing that with Circle's monthly attestation is the most direct way to weigh the two.

USAT: Tether's US-issued token

Tether has introduced a separate dollar token for the US market called USAT. Its official site states that USAT's issuer is Anchorage Digital Bank, N.A., and that Tether Operations, the site's publisher, is not the issuer. USAT and USDT are different tokens, so don't assume one can be swapped for the other one-to-one on every platform.

Side-by-side comparison

What the GENIUS Act changes

The Guiding and Establishing National Innovation for U.S. Stablecoins Act, known as the GENIUS Act, became Public Law 119-27 when it was signed on July 18, 2025. It's the first federal framework specifically for payment stablecoins. Here's what the enacted text does that matters for USDC and USDT holders.

• Permitted issuers only, after a transition. Starting three years after enactment, it becomes unlawful for a digital asset service provider, such as an exchange, to offer or sell a payment stablecoin to a US person unless a permitted payment stablecoin issuer issued it (Sec. 3(b)(1)). That points to roughly July 2028, with exceptions laid out elsewhere in the law.
• Foreign issuers. A foreign issuer's stablecoin can only be offered in the US if the issuer can and will comply with lawful orders and meets the law's rules on reciprocal arrangements with comparable foreign regimes (Sec. 3(b)(2) and Sec. 18).
• Reserves and monthly reports. Issuers must hold reserves at least 1:1, publish monthly reports on reserve composition, have those reports examined by a registered public accounting firm, and have the CEO and CFO certify them, with criminal penalties for knowingly false certifications (Sec. 4(a)).
• Audits for the largest issuers. Issuers with more than $50 billion in outstanding stablecoins that aren't already SEC reporting companies must publish annual audited financial statements (Sec. 4(a)(10)).
• No interest from the issuer. Permitted and foreign issuers can't pay holders interest or yield just for holding the stablecoin (Sec. 4(a)(11)).
• Priority in insolvency. The White House summary of the law says stablecoin holders get priority over other creditors if an issuer fails.

What about "rewards" on stablecoins?

The yield ban applies to issuers. Some exchanges still offer their own rewards programs on stablecoin balances; Kraken's earn page, for example, listed USDC and USDT under its Auto Earn program on October 29, 2026. Those are platform programs with their own terms and risks, not interest from Circle or Tether, and they could change as regulators interpret the law.

How redemption works in practice

Circle says USDC is always redeemable 1:1 for dollars, and Tether describes USDT as pegged 1-to-1. In practice, most individuals turn stablecoins into dollars by selling them on an exchange for USD and withdrawing to a bank. That means your real-world exit depends on your exchange's pairs, fees and withdrawal options as much as on the issuer. If you hold stablecoins on Kraken, our guide to withdrawal fees and Kraken's free ACH withdrawals are the practical path back to your bank.

Risks both coins share

• De-pegging. A stablecoin can trade below $1 if markets doubt the reserves or the issuer can't process redemptions fast enough.
• No FDIC insurance. Neither coin is a bank deposit. The FTC notes crypto isn't insured like FDIC-covered deposits.
• Freezes. Issuers can freeze tokens at specific addresses. The White House summary says the GENIUS Act requires issuers to be able to freeze, seize or burn tokens when legally required.
• Platform risk. If you hold stablecoins on an exchange, you also carry that exchange's risk. Our exchange safety guide covers what protections exist.
• Network mistakes. Both coins exist on several blockchains. Sending on the wrong network can lose funds, so always match the network on both ends.

How to choose between them

• Choose USDC if you value a US-based issuer, a US state license, and a reserve fund with daily third-party reporting.
• Choose USDT if you need the deepest liquidity across global platforms and trading pairs, and you're comfortable reading Tether's reserve reports yourself.
• Hold some of each if you keep large stablecoin balances and want to spread issuer risk.
• Check your platform before acting. Which stablecoins and networks an exchange supports for US customers can change, especially as the GENIUS Act transition approaches.

For trading costs, check whether your exchange charges less on stablecoin pairs. Gemini, for instance, lists zero maker and taker fees on its GUSD/USD, USDC/GUSD and RLUSD/USD pairs. Our best exchange for stablecoin trading guide compares the options.