USDT vs. USDC vs. DAI: how the big stablecoins differ
Three dollar stablecoins, three very different answers to "what's behind the $1?"
USDT (Tether) and USDC (Circle) are issued by companies that hold reserves and redeem coins for dollars; DAI is created by the Sky (formerly Maker) protocol against collateral that users lock in smart contracts. USDT is the largest and holds some gold, bitcoin and loans alongside Treasury bills; USDC holds cash and a government money market fund and is a US-listed company's product. All three have briefly traded below $1, and none is a bank deposit.
Live prices
All three aim for $1. Small moves of a fraction of a cent are normal.
| Stablecoin | Price | 24h change | Market cap |
|---|---|---|---|
| Tether USDT | — | — | — |
| USD Coin USDC | — | — | — |
| Dai DAI | — | — | — |
Loading live prices…
Side by side
| Compare | USDT (Tether) | USDC (USD Coin) | DAI |
|---|---|---|---|
| Issued by | Tether, a private company | Circle, a company listed on the NYSE | No company issues it: smart contracts of the Sky protocol (formerly MakerDAO) |
| How new coins are made | Approved customers send dollars to Tether | Approved customers send dollars to Circle | Users lock collateral and borrow DAI against it, or swap other stablecoins in |
| What backs it | Mostly US Treasury bills and repos, plus gold, bitcoin, secured loans and other investments | Cash at banks and a government money market fund managed by BlackRock | Crypto collateral, other stablecoins (largely USDC), and tokenized real-world assets such as Treasury bills |
| Reports | Quarterly attestation by accounting firm BDO | Weekly reserve figures and monthly attestation by a Big Four firm | On-chain data anyone can inspect, plus monthly financial reports from Sky |
| Size | About $183.5 billion of tokens outstanding (Tether attestation, September 30, 2026) | About $73.5 billion in reserves (September 30, 2026) | Much smaller: about $4.7 billion of DAI plus $6.5 billion of Sky's newer USDS (DefiLlama, November 4, 2026) |
| Main blockchains | Tron and Ethereum, plus many others | Ethereum, Solana, Base and many others | Mainly Ethereum and its layer 2s |
| Can it be frozen? | Yes, by Tether | Yes, by Circle | The DAI contract has no freeze function, but collateral such as USDC can be frozen by its issuer |
Reserves and attestations, in plain terms
An attestation is an accountant's report that the reserves on a given date matched what the issuer said. It isn't a full audit of the company. Tether's attestation for September 30, 2026 reported $191.45 billion of reserves against $183.50 billion of liabilities, including about $19 billion in precious metals and $8.4 billion in bitcoin, according to coverage of the BDO report. Circle publishes reserve figures weekly and files quarterly reports with the SEC as a listed company.
DAI works differently. Each DAI is created when someone locks collateral worth more than the DAI they borrow; if the collateral's value falls too far, it's sold automatically. Over time, much of DAI's backing shifted to USDC and tokenized Treasury bills, which made it steadier but tied it to the same traditional assets.
DAI and USDS
In August 2024 MakerDAO rebranded as Sky and, in September 2024, launched a new stablecoin, USDS, that DAI holders can optionally upgrade to one-for-one. DAI still exists. In 2026 several large exchanges began converting DAI balances to USDS. If you hold DAI, check whether your app supports both.
When they slipped below $1
- March 2023 (USDC and DAI): Circle disclosed that $3.3 billion of USDC's reserves, about 8% of the total, were held at Silicon Valley Bank, which had just failed. USDC fell to about $0.88 overnight, and DAI, heavily backed by USDC at the time, fell with it. Both recovered within days once US authorities guaranteed SVB's deposits.
- May 2022 (USDT): after the algorithmic stablecoin TerraUSD collapsed, USDT briefly fell to about $0.95 on May 12, 2022, as holders rushed to redeem. Tether paid out billions in redemptions and it returned to $1.
The lesson is the same for all three: "stable" depends on the quality and accessibility of the backing, and in a panic even well-backed coins can wobble.
Regulation: the GENIUS Act
The GENIUS Act, signed on July 18, 2025, is the first US federal law for "payment stablecoins". Under it, issuers serving US customers must be licensed, hold one-for-one reserves in cash, short-term Treasuries and similar assets, publish monthly reserve reports, and may not pay interest to holders. The law takes effect on January 18, 2027; the OCC published its final rule for issuers it supervises on October 21, 2026. After a three-year transition, US platforms generally won't be allowed to offer payment stablecoins from issuers that aren't permitted or approved.
- USDC: issued by a US company that has said it intends to comply.
- USDT: Tether is based outside the US. In January 2026 it launched a separate US-regulated token, USAT, issued by Anchorage Digital Bank. How USDT itself fits the new rules, given its gold and bitcoin reserves, was still being debated in 2026.
- DAI: has no company issuer to license, so its position under the Act is less clear than the other two.
In the EU, the MiCA regulation applies instead: USDC is authorized there, and many EU platforms restricted USDT in 2025.
For a two-way live comparison see Tether vs. USD Coin; for the basics, what is a stablecoin?
Related reading: The stablecoin market: size, structure and risks · Decentralized stablecoins: how DAI and USDS work · Crypto regulation in the United States · Crypto regulation in the European Union
Frequently asked questions
Which is safer, USDT, USDC or DAI?
None is risk-free, and we don't rank them. They carry different risks: USDT depends on Tether and a wider mix of reserves; USDC on Circle and its banks; DAI on smart contracts and its collateral, much of it other stablecoins.
Is DAI backed by dollars?
Not directly. DAI is backed by collateral locked in smart contracts: crypto, other stablecoins such as USDC, and tokenized assets like Treasury bills.
Did USDC ever lose its peg?
Yes. In March 2023 it fell to about $0.88 after $3.3 billion of its reserves were caught at Silicon Valley Bank, then recovered within days.
Is USDT legal in the US?
Yes, holding and using USDT isn't illegal. The GENIUS Act will limit which stablecoins US platforms can offer after a transition period, and Tether launched a separate US-regulated token, USAT, in 2026.
Do USDT, USDC or DAI pay interest?
The coins themselves don't, and the GENIUS Act bars licensed issuers from paying interest. Apps that offer "rewards" are taking your coins' risk somewhere. DAI and USDS can be deposited in Sky's savings contracts, which carries smart-contract risk.
What's the difference between DAI and USDS?
USDS is the newer stablecoin from the same Sky protocol. DAI can be upgraded to USDS one-for-one, and both still exist.
Where to next
Sources
- OCC Bulletin 2026-50: GENIUS Act final rule (OCC, October 21, 2026)
- Congress enacts the GENIUS Act: key provisions (Fenwick, July 2025)
- Tether reports Q3 profit as reserves reach $191.5B (Bitcoin.com News, October 30, 2026)
- Tether transparency (tether.to)
- USDC transparency (Circle)
- Circle Form 10-Q, quarter ended September 30, 2026 (SEC)
- USDC and DAI at about $0.90 after Circle's SVB disclosure (The Block, March 11, 2023)
- Tether loses dollar peg amid stablecoin crisis (Decrypt, May 12, 2022)
- MakerDAO rebrands to Sky; DAI optionally upgradeable to USDS (The Block, August 2024)
- Sky ecosystem monthly update, March 2026 (Sky)
- Tether launches US-regulated USAT issued by Anchorage Digital (Decrypt, January 2026)
Written for beginners and checked against the sources listed. Last reviewed November 4, 2026. This page is educational and is not financial, tax or legal advice. How we write and check pages.