The market for stablecoins has become increasingly saturated in recent years. However, USDC has strived to distinguish itself from competitors in various ways. One notable aspect is its commitment to transparency and providing users with the confidence that they can withdraw 1 USDC and receive $1 in return without any complications. To achieve this, USDC has enlisted the services of a reputable accounting firm to verify the amount of cash held in reserve, ensuring it aligns with the number of tokens in circulation. In addition, both Circle and Coinbase, the entities behind USDC, have successfully complied with regulatory requirements. This accomplishment has not only facilitated their expansion into international markets but has also instilled trust in the stability of the stablecoin due to their solid financial backing.
Coinbase briefly considered the option of diversifying the funds supporting USDC, but later retracted the proposal due to strong opposition from the community. The transparency regarding the origin of its funds has played a significant role in the success of USDC. In contrast to its competitor USDT, which has faced multiple investigations, USDC has never been implicated in any wrongdoing. As a result, USDC has been able to gain a larger share of the stablecoin market, gradually diminishing USDT's dominance. While USDT held a 74% market share compared to USDC's 16% in February 2021, this lead has now narrowed to 45% for USDT and 30% for USDC as of February 2022.
