What are “stable coins”? Stable coins are a weird part of the cryptocurrency world. These blockchain based currencies seek to anchor their value with some widely used money such as US dollars (USD). US Dollar Tether (USDT) and US Dollar Coin (USDC) are two such stable coins.
USDT is traded on a few exchanges such as Bitfinex and Poloniex, and USDT is supposedly backed by USD in bank accounts, but this cannot be verified and no public audit has been released. USDC on the other hand is being traded in a few exchanges also, and is being issued by a clearinghouse created by Circle (the owners of Poloniex).
The principals at Bitfinex are connected to those at USDT, and Bitfinex has been the major conduit for USDT adoption. Since releasing USDC, Poloniex has listed a USDT/USDC pair for users to trade. I think this is fascinating because now we’ll have a place to compare value directly. This may cause USDT to “break the buck”. At the time of writing, four days into trading, the rate stands at 0.985 and has been falling a bit each day. The issuer of USDT better look for ways to become more transparent or else may need to find ways for users to redeem USDT for USD. If users can exchange USDC with USD directly at Circle, then USDC might become much more functional.