Why I’m Converting USDT to USDC
The Key Reason: High Exposure to U.S. Treasuries
Stablecoins are designed to stay close to the value of the U.S. dollar, but not all stablecoins are backed in the same way. Recently, I decided to convert assets from USDT to USDC, and the core reason is simple:
USDC is heavily backed by U.S. government bonds.
Why USDT Raises Concerns
USDT has faced ongoing doubts due to:
- Limited transparency
- Reserves that include commercial paper and other riskier assets
- Regulatory and issuer-related uncertainties
These factors introduce credit and liquidity risk, especially during market stress.
Why USDC Stands Out
The most important strength of USDC is its reserve quality.
- A large portion of USDC reserves is held in short-term U.S. Treasury bonds
- The rest is kept in cash
- Reserves are reported regularly through third-party attestations
U.S. Treasuries are considered one of the safest and most liquid assets in the world, making USDC structurally more resilient.