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USDT, USDC, which is safer? Larry Cermak: USDT actually complies with all regulations.

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USDT, USDC, which is safer? Larry Cermak: USDT actually complies with all regulations.

In the past year, the two major stablecoins USDT and USDC have expanded rapidly with excellent liquidity. Despite users being aware of the potential regulatory risks associated with stablecoins, they continue to be widely used. A tweet today sparking a debate on which is safer between USDT and USDC has garnered significant attention, with comments from the founder of FTX.

USDT vs. USDC: Which One is Safer?

Although USDT's market capitalization has grown from $3 billion to over $60 billion since last year, its dominance on the Ethereum chain has been declining since May this year, while USDC's leading position in Ethereum has become more prominent, even planning to go public via SPAC in the fourth quarter of this year.

Analyst Twitter account @AltcoinPsycho, with 280,000 followers, asked the crypto community for their opinions on the two stablecoins, and the results clearly show that the public has less trust in USDT.

However, Larry Cermak, Research Director at "The Block," believes that the public's bias against USDT is merely a herd mentality.

USDT's Past Controversies

Larry stated that this depends on the definition of safety; in fact, USDC is easier to freeze than USDT, and if an address is entered incorrectly, the recovery process for USDC is more troublesome, but USDT excels in this regard.

Furthermore, Larry believes that the non-compliance of USDT is a common misconception among the public, but this is not the case. Tether actually complies with the regulations required in the United States, and the idea of "complying with more regulations" is a strange one. He pointed out:

The key point is Tether's checkered past, although I think the likelihood of a joint regulatory action is higher, the probability of Tether being targeted is definitely much greater if it comes down to a single entity.

SBF: Different Markets for Both

Sam Bankman-Fried SBF, founder of FTX, stated that USDT has better liquidity in the secondary market, while USDC has better liquidity in the primary market. Whether it is safe or not depends on whether you are concerned about its US dollar value collapsing by 1%, 10%, or 90%.

Tether's CTO, Paolo Ardoino, also responded to this, but he did not address regulatory concerns, instead responding to SBF's collapse theory. He pointed out:

Since the Black Swan event in March last year, Tether has grown from a market value of $3 billion to $63 billion. Maintaining super liquidity on centralized exchanges is key to our success. Assuming a market collapse of 90%, I am pretty sure that not just Tether, but all stablecoins would see a much larger increase.

Netizens pointed out that what SBF mentioned was a stablecoin collapse of 90%, not a market collapse.

Paolo Ardoino emphasized that Tether has excellent liquidity, and there has never been an issue with redeeming US dollars. Despite the widespread FUD, USDT remains pegged to the dollar everywhere, making its trustworthiness a very clear matter.