Key takeaways
- S&P Global Ratings scored USDT's ability to hold its dollar peg at 5 (weak) on 26 November 2025, and USDC's at 2 (strong) on 18 December 2025.
- Tether received an unqualified KPMG U.S. audit opinion on its 2025 financial statements on 13 August 2026, its first full audit after years of quarterly attestations.
- USDC dipped to a $0.960264 daily close in March 2023 after the collapse of Silicon Valley Bank, where Circle held $3.3 billion, roughly 8% of USDC reserves.
- The GENIUS Act, law since 18 July 2025, bars permitted stablecoin issuers from paying holders interest or yield, so reserve income stays with the issuer.
- Tether's direct redemption route starts at $100,000, and each redemption costs at least $1,000 or 0.1% of the amount, whichever is higher, after a $150 verification fee.
$4.11 billion. That was Tether's cushion over its USDT liabilities on 30 June 2026, far more than Circle holds, yet S&P Global Ratings scores USDC's peg stronger. The USDC vs USDT question splits along exactly that line: one token carries the bigger buffer, the other the safer assets.
Tether's accounts carry a full audit opinion since 13 August 2026, when KPMG U.S. signed off its 2025 financial statements without qualification. Before that, the company published only attestations, which check reserves against tokens on a single date. The audit confirmed the size of the reserves, and the mix S&P marks down stayed as it was.
What you are choosing between is two different ways a dollar token can break.
USDC vs USDT: How the Two Compare, Point by Point
USDC scores better on reserve quality and regulation, USDT on size and cushion, and the points below show where each gap sits.
USDC, issued by Circle
- Reserve assets: mostly a BlackRock-managed government money market fund, plus bank cash
- Cushion: $74.8 billion of reserves against $74.6 billion in circulation on 21 September 2026
- Checks on reserves: weekly holdings disclosure and monthly assurance from a Big Four firm
- Issuer and home: Circle Internet Group, New York-listed, with an EU e-money license from France
- Chains: 38 mainnet networks on Circle's own list
- S&P peg score: 2 (strong), assessed on 18 December 2025
- Stress-week low close: $0.960264 on 11 March 2023
USDT, issued by Tether
- Reserve assets: US Treasuries, repo, physical gold, bitcoin and secured loans
- Cushion: $4.11 billion, or 2.24% of liabilities, on 30 June 2026
- Checks on reserves: quarterly attestation by BDO, plus a KPMG audit of the 2025 accounts
- Issuer and home: Tether International, S.A. de C.V., licensed in El Salvador
- Chains: 13 networks in circulation on 24 September 2026, 97.5% on Tron and Ethereum
- S&P peg score: 5 (weak), reassessed on 26 November 2025
- Stress-week low close: $0.995969 on 11 May 2022
What Actually Sits Behind Each Dollar Token?
A promise to swap the token back for a dollar, and a pool of assets meant to honor it. A stablecoin is a token built to trade at one dollar because its issuer stands ready to redeem it at that price. Think of a casino chip: worth a dollar at the cashier's window for as long as the cage holds enough cash.
Most of the USDC reserve sits in the Circle Reserve Fund, an SEC-registered government money market fund run by BlackRock, according to Circle's transparency page. The rest is cash, mostly at a handful of the world's largest banks. Tether's reserves lean on US government paper too. Its Q2 report adds physical gold, above 146 tons at 30 June 2026, and bitcoin, while secured lending fell by $2.38 billion in the quarter.
Those extra holdings explain the gap in cushions. A money market fund barely moves in price, so Circle runs with roughly $0.2 billion of headroom, about 0.27% of the USDC in circulation. Gold and bitcoin move every day, and Tether keeps $4.11 billion against $183.64 billion of liabilities to absorb a fall. As a share of what it owes, that buffer is about eight times Circle's.
How Much Does Holding $10,000 of Either Cost?
About $418 a year in interest you never see, if short-term rates hold. The 13-week Treasury bill yielded 4.18% on a coupon-equivalent basis on 24 September 2026, according to Treasury's daily bill rates. Both issuers hold your dollars in assets earning close to that, and the income goes to them.
US law keeps it that way for regulated issuers. The GENIUS Act says no permitted payment stablecoin issuer "shall pay the holder of any payment stablecoin any form of interest or yield" for simply holding it. Tether said its Q2 net operating profit of about $1.50 billion was led by its Treasury and repo portfolio.
With Tether, leaving costs more than arriving, mostly because of the minimum. Its fee schedule sets $100,000 as the smallest direct redemption and charges the greater of $1,000 or 0.1%. Redeeming the minimum therefore costs $1,000, or 1%, while redeeming $1 million costs the same $1,000, or 0.1%. A $150 account verification fee comes first. Circle handles direct redemption through Circle Mint, which its EU launch notice describes as a service for business customers. A $10,000 holder therefore exits either token through an exchange, at the market price.
How Far Has Each Token Fallen Below One Dollar?
USDC has fallen further, once, and the cause sat in a bank. A depeg is any stretch in which a stablecoin trades away from its dollar value. USDC's came in March 2023, when Silicon Valley Bank failed holding $3.3 billion of USDC reserves, about 8% of the total, according to Circle. The token closed at $0.960264 on 11 March on CoinGecko's daily data and recovered to $0.999658 by 13 March, after US authorities said every depositor would be made whole. Its market capitalization fell by $5.09 billion between 9 and 15 March.
USDT was tested in May 2022 and moved less on price. Its lowest daily close that week was $0.995969, on 11 May, while its market capitalization fell by $7.37 billion between 9 and 15 May, according to CoinGecko.
Daily closes smooth over intraday moves, so the true lows were at least this deep. Even so, a 0.4% dip during $7.37 billion of outflows is an undramatic result.
Has Anything Changed Since S&P Downgraded USDT?
The reporting has improved while the score stayed at 5. S&P Global Ratings cut USDT to 5 (weak) from 4 (constrained) on 26 November 2025, writing: "The negative revision reflects an increase in higher-risk assets backing USDT's reserve since our last review." Its assessment page showed no later revision when checked on 25 September 2026.
Since then Tether has released its Q2 attestation, prepared by BDO, on 31 July 2026, and the KPMG audit followed on 13 August. Both concern how thoroughly the numbers are checked. Neither was meant to change what the reserves hold. In Q2 the mix moved both ways: secured lending fell by $2.38 billion while gold holdings rose by 14 tons, according to chief executive Paolo Ardoino.
Where Each Token Stands With Regulators and the IRS
USDC sits inside more rulebooks. Circle's French subsidiary won an e-money license from the ACPR, France's banking supervisor, on 1 July 2024. Circle said that made USDC compliant with the EU's Markets in Crypto-Assets regulation, known as MiCA. On 10 July 2026 the Office of the Comptroller of the Currency gave Circle final approval for a national trust bank. It will start with custody and could later manage the USDC reserve.
Tether's issuer is Tether International, S.A. de C.V., and the group took a digital asset service provider license in El Salvador in January 2025. For the US it built a separate token, USA₮, launched on 27 January 2026 and issued by Anchorage Digital Bank, N.A. In that announcement Tether described USD₮ itself as "progressing towards GENIUS Act compliance."
The GENIUS Act became Public Law 119-27 on 18 July 2025. It takes effect by 18 January 2027 at the latest, or 120 days after regulators issue final rules if that comes first. It also requires permitted issuers to publish reserve composition monthly.
For tax, the IRS lists stablecoins as digital assets, and exchanging one digital asset for another is a transaction you report. Swapping USDC for USDT, or cashing either out, can produce a small gain or loss across a gap of a fraction of a cent. Our crypto tax explainer covers the reporting. None of this is tax or financial advice, and these US and EU rules differ elsewhere.
What This Means for Money You Keep in Stablecoins
It depends on how long the money sits there. For a balance you move within days, either token does the job, and the choice usually comes down to what your exchange supports. For savings held for months, the $418 you give up on every $10,000 and the quality of the reserves matter more than liquidity. Splitting a large balance between the two issuers keeps one failure from taking all of it. Before moving a large sum, check each issuer's own page, since the figures change weekly.
So Which Token Should You Hold for Your Purpose?
Match the token to the job, since neither wins every category. Our RWA and DeFi coverage tracks both issuers as the picture shifts.
- Holding for months, or living in the EU: USDC, for its cash-like reserves and its standing under MiCA.
- Trading on Tron: USDT, which Tether issues there, while Tron does not appear on Circle's list of networks for native USDC.
- A US institution that wants Tether under US rules: USA₮, issued by Anchorage Digital Bank.
- Anyone who cannot absorb one issuer's failure: both, split, so no single issuer holds more than you could manage without.
S&P Global Ratings reads Tether's reserve mix as grounds for a 5. Tether reads the same balance sheet, backed by the KPMG opinion of 13 August 2026, as proof that USDT's stability "is no longer just a Tether promise; it's a signed opinion."
Frequently asked questions
What does a full audit check that an attestation does not?
An attestation confirms that an issuer's reserves matched its tokens on one reporting date. A financial statement audit goes further. KPMG's audit of Tether's 2025 accounts examined transactions, systems, ownership records, valuations and counterparties, and its staff physically counted every gold bar, according to Tether. Circle publishes monthly attestations and has Deloitte audit the company's own financial statements.
Which stablecoins does S&P rate the strongest?
S&P Global Ratings lists USDC, EURC, Paxos USD (USDP) and Global Dollar (USDG) at 2 (strong) on its stablecoin assessment page, with those scores dated between December 2025 and February 2026. USDT sits at 5 (weak), the same score S&P gives TrueUSD. The scores measure the ability to hold a peg, which is narrower than overall safety, and S&P revises them.
What is USA₮, and how does it differ from USDT?
USA₮ is a second dollar token from the Tether group, launched on 27 January 2026 for American users and issued by the federally regulated Anchorage Digital Bank under the GENIUS Act framework. USDT itself still comes from Tether's El Salvador-based issuer, which Tether says is working toward compliance with the same law. The two share a brand and differ in issuer and oversight.
What happened to USDT on Omni, EOS and other older blockchains?
Tether has stopped issuing USD₮ on Kusama, Bitcoin Cash SLP, Omni Layer, EOS and Algorand, and says on its transparency page that it is no longer obligated to redeem tokens on those chains. If you still hold USDT on one of them, the issuer's promise to swap it back for a dollar no longer covers those tokens.
Where can you check each token's reserves yourself?
Circle's transparency page breaks down the USDC reserve and shows issuance and redemption over several windows, while BlackRock publishes daily holdings for the Circle Reserve Fund under the ticker USDXX. Tether's transparency page shows USDT circulation chain by chain, typically refreshed daily, and links to its quarterly reserves report and the attestation behind it.
